The Bureau of Industry and Security added 37 entities to the Entity List for a range of reasons, including for supplying controlled items to Iran, supporting China’s military modernization efforts, illegally providing items to Russia and contributing to surveillance efforts in China and Myanmar. The entities -- located in Belarus, Myanmar, China, Pakistan, Russia and Taiwan -- will be subject to a license requirement for all items subject to the Export Administration Regulations with varying license application review policies. BIS also modified 10 existing Chinese entries on the Entity List. The additions and changes take effect March 2.
Exports to China
The Bureau of Industry and Security is considering new export controls on certain machinery or lab equipment used by Chinese suppliers of precursor chemicals, which are used to produce fentanyl. BIS Undersecretary Alan Estevez, speaking during a Feb. 28 House Foreign Affairs Committee hearing, said the agency is working with the Drug Enforcement Administration “to assess whether we can put restrictions” on those items. “So we're doing that kind of assessment, working both on the enforcement and my export administration side to see what we can do to crack down on that,” he said. Estevez was responding to a question from Rep. Madeleine Dean, D-Pa., who asked how the administration is working to “pressure” China to “combat financial flows from illicit fentanyl.”
The Biden administration should be doing more to harmonize its export controls and sanctions lists to more effectively penalize foreign companies that should be subject to strict trade restrictions, lawmakers said this week. Several Republicans suggested they plan to pursue legislation to mandate that the Bureau of Industry and Security’s Entity List be aligned with sanctions lists maintained by the Treasury Department, and at least one lawmaker said BIS should already have taken steps to formally do so.
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South Korean chip companies are dealing with significant “uncertainty” stemming from U.S. chip controls issued in October against China (see 2210070049) and are concerned about the looming expiration of a one-year authorization from the Commerce Department, a Korean economic security expert said last week. Although Bureau of Industry and Security Undersecretary Alan Estevez said the agency is working with Korean companies on potentially extending certain aspects of the authorization, details of those conversations remain unclear.
China's Chamber of Commerce for Import and Export of Machinery and Electronic Products held an export control compliance forum on Feb. 23, the Ministry of Commerce announced, according to an unofficial translation. Commerce Vice Minister Wang Shouwen said the Chinese government will look to further strengthen its guidance and assistance to businesses subject to export controls to safeguard their interests. He said the Chinese government actively backs international cooperation in export controls while promoting trade in controlled items.
The proposed Chip 4 Alliance of the U.S., Japan, South Korea and Taiwan (see 2212280035 and 2210050009) likely will not be enough to keep U.S. semiconductor technology ahead of China, one lawmaker and several experts said during a Feb. 22 event hosted by the Atlantic Council. For the U.S. to achieve true multilateral chip cooperation, including with the EU, experts said, the U.S. may have to settle for watered-down restrictions.
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House Foreign Affairs Committee Republicans are asking the Bureau of Industry and Security for information on its export enforcement and compliance efforts involving China, including steps to crack down on Chinese transfers of controlled U.S. technology to State Sponsors of Terrorism (SSTs). In a letter sent to BIS last week, Rep. Michael McCaul of Texas, chair of the committee, said he is concerned China’s “economic and trade ties” with terrorism sponsors is “undermining U.S. national security and foreign policy interests.” He and Rep. Michael Lawler, R-N.Y., asked BIS to provide information on recent Chinese export violations, licensing procedures, end-use checks and more by March 2.
Europe has so far “neglected” the increasing competitiveness of Chinese chip design companies, presenting “challenges across the dimensions of national security, supply chain resilience and technological competitiveness for Europe,” European research institutions said in a recent report. Written by the Digital Power China research consortium and the Leiden Asia Centre, the report said the EU should better invest in its own chip design capabilities, strengthen the “indispensability” of its chip firms through “policy interventions,” “map the risk profile of increasing reliance on Chinese chip design” and more.