The Bureau of Industry and Security is expanding the scope of its Russia/Belarus-related Foreign-Direct Product rule and adding new export controls on certain computer numerical control (CNC) machine tools-related software, the agency said last week. The FDP rule changes, effective Aug. 27, allow BIS to “more aggressively target” third-country companies procuring controlled goods that are indirectly sent to Russia, BIS said, while the CNC machine tool controls, effective Sept. 16, will prevent those tools in Russia and Belarus from receiving certain software updates.
Nearly a quarter of the 123 new entries the Bureau of Industry and Security will add to its Entity List this week are Chinese suppliers that the agency named in private red-flag letters to U.S. companies earlier this year.
Although export control reforms by the U.S., Australia and the U.K. could exempt about three-quarters of defense trade between the countries and reduce compliance costs for industry, more updates are needed to remove lingering licensing barriers and address structural challenges posed by the International Traffic in Arms Regulations, researchers said this week.
Most EU member states missed a July deadline to implement the EU’s new corporate sustainability reporting rules into national law, causing uncertainty for businesses that want to ready their compliance procedures before the rules take effect beginning next year, a major European law firm said.
The Treasury Department should make sure its investment screening regulations don’t unfairly discriminate against foreigners and should do more to curb a rise in “xenophobic” U.S. state and federal land laws, nonprofits told the agency and the Committee on Foreign Investment in the U.S. They criticized several bills that could place new investment restrictions on people from “countries of concern,” including China and Iran, and said they’re concerned CFIUS may not have the resources to manage its expanding jurisdiction.
Federal Maritime Commissioner Carl Bentzel hopes to issue a final report later this year that will expand on ways carriers, ports, railroads and others can better share supply chain data and real-time shipping information, he said this week. Bentzel said he believes the government eventually should turn some of the report’s recommendations into new mandates, including one that would require carriers to provide shippers with live, in-transit updates on their cargo.
A new rule issued by the State Department last week will finalize an exemption for defense trade between the U.S., Australia and the U.K., potentially removing export control barriers for a range of items that had previously faced strict license requirements under the International Traffic in Arms Regulations. Australia and the U.K. said the exemption and other AUKUS changes are expected to lift restrictions on billions of dollars worth of exports each year and eliminate hundreds of export licenses once the “license free” trade begins next month.
The Committee on Foreign Investment in the U.S. has levied nearly $70 million in penalties so far this year, including a $60 million fine against T-Mobile after the telecommunications company violated its national security agreement. The announcement, the first time CFIUS has named a company it has penalized, comes after the committee last year issued a record-setting four penalties (see 2407230017) and in April proposed expanding its enforcement powers (see 2404110037), underscoring its recent focus on punishing violators and increasing penalties.
The Bureau of Industry and Security this week fined a Pennsylvania electronics business and its Hong Kong affiliate $5.8 million after the company voluntarily disclosed and admitted to illegally shipping controlled technology to China, including to military research institutes on the Entity List. The company, TE Connectivity Corporation, had “knowledge or reason to know” that the shipments violated U.S. export controls, BIS said, adding that its employees in China hid the true end-users and bypassed the company’s denied-party screening process.
The State Department this week published a final version of a rule to expand its regulatory definition of activities that don’t need a license because they don’t qualify as exports, reexports, retransfers or temporary imports. The rule, effective Sept. 16, is largely consistent with the proposed version, though the agency made changes to narrow its scope and make sure certain temporary imports will still require a license.