The U.S., Japan and South Korea last week agreed to boost export control cooperation -- including enforcement -- to prevent technologies with military or dual-use applications from being “illegally exported or stolen abroad.” The commitment was one of several made after Aug. 18 meetings at Camp David -- the first stand-alone summit among the three nation’s leaders -- and “signifies a new era of trilateral cooperation," National Security Adviser Jake Sullivan said.
The European Commission this week officially adopted rules covering the transitional phase for its carbon border adjustment mechanism, which will eventually set new requirements on imports of electricity, fertilizers, hydrogen, steel, aluminum, cement and other items, including from the U.S. (see 2212130056). During the transition period, which launches Oct. 1 and runs through 2025, traders will be required to report on the emissions “embedded in their imports” that are covered by the mechanism, but they won’t have to pay any taxes.
The Bureau of Industry and Security made several changes to the Export Administration Regulations this week to align its controls with decisions made at the multilateral Nuclear Suppliers Group in 2019 and 2022. The amendments, outlined in a final rule effective Aug. 18, revised five existing Export Control Classification Numbers under the Commerce Control List to alter or clarify the scope of certain controls and make technical fixes to other ECCNs.
New Indian import restrictions on computers and other electronics could “significantly disrupt” trade, including U.S. exports, eight industry groups wrote in a letter this week to U.S. Trade Representative Katherine Tai and Commerce Secretary Gina Raimondo. The groups -- representing the American semiconductor, electronics, manufacturing and retail industries -- asked the Biden administration to raise the issue with the Indian government “as a matter of urgency.”
American building materials supplier Construction Specialties Inc. (CS) reached a $660,594 settlement with the Office of Foreign Assets Control this week for allegedly violating sanctions against Iran. OFAC said the company’s United Arab Emirates subsidiary, Construction Specialties Middle East (CSME), illegally reexported more than $1 million worth of construction materials to Iran and falsified trade documents to hide their destination.
The Bureau of Industry and Security clarified rules surrounding two deemed export scenarios in a new advisory opinion issued in June and released publicly this week. The opinion said U.S.-based subsidiaries are allowed to release certain controlled technologies to their foreign parent companies’ employees -- when they are on temporary assignment in the U.S. -- if the American subsidiary already has an export license to ship the item to its parent company. BIS also said the U.S. subsidiary can use its export license to ship covered items to its parent company if the items were developed by employees on temporary assignment in the U.S.
Export Compliance Daily is providing readers with the top stories from last week in case you missed them. You can find any article by searching for the title or by clicking on the hyperlinked reference number.
Compliance departments need to be increasingly “creative” to catch goods or transactions that may be tied to Russian sanctions evasion, an industry official and former Treasury Department official said this week, especially as the U.S. and its allies ramp up enforcement. They also said compliance is growing more complex, particularly for financial institutions, which must meet expanding government expectations outlined in joint alerts recently published by the Commerce and Treasury departments.
The U.S. removed sanctions from two former board members of a Russian state-owned bank after both argued they didn’t meet the criteria for placement on the Treasury Department’s Specially Designated Nationals List. The sanctions removals, made by the Office of Foreign Assets Control late last month, came after Russian nationals Elena Titova and Andrey Golikov, in separate complaints, sued the U.S. government over their designations, accusing it of sanctioning them on “no factual basis” and “unnecessarily” delaying delisting decisions.
The U.S. may run into challenges enforcing aspects of its new outbound investment restrictions on China, especially for intercompany transfers and investments, Sarah Bauerle Danzman, a former State Department official, said during a webinar hosted by the Center for a New American Security last week. She said investors will likely need more guidance on the issue whenever the Treasury Department releases regulations for the regime.