The State Department can’t track how many voluntary disclosures it receives involving export violations related to defense services because of “limitations” in its IT system and data collection efforts, the Government Accountability Office said in a report last week. GAO said this may be preventing the agency from evaluating trends or risks related to illegal exports.
The U.S. is making “good progress” on aligning export controls over sensitive technologies with allies, Deputy Secretary of State Wendy Sherman said this week, adding that almost all the administration's recent discussions with trading partners have involved China technology issues. She also said the agency is working to counter a growing oil partnership between China and Iran, but said preventing China’s purchases has proven challenging.
Several former U.S. officials urged lawmakers this week to improve U.S. investment controls, including former National Security Council official Peter Harrell, who said Congress should further bolster the Committee on Foreign Investment in the U.S. to better restrict Chinese investments. Harrell said Congress should address limits on the ability of CFIUS to “review certain high-risk greenfield investments” by Chinese companies. “It's time to look, and for this committee to look, at continuing weaknesses in the CFIUS regime,” Harrell said during a Feb. 7 House Financial Services Committee hearing.
The Biden administration’s implementation of its new China chip export controls (see 2210070049) has been “mixed,” and it remains unclear how far allies will go to impose similar restrictions, said Clete Willems, who was a National Security Council official during the Trump administration. Willems, in written testimony this week to the House Financial Services Committee, said he doesn’t understand why the administration didn’t initially coordinate the October export control rule with allies, a shortcoming that could be hurting U.S. companies now.
The U.S. and its allies should establish a new multilateral export control system to prevent sensitive technologies from being sent to dangerous end-users, including those in China, said Rich Ashooh, a former senior U.S. export control official. Ashooh applauded American efforts so far and said it shouldn’t abandon the existing multilateral control regimes, but he said a more formal system is needed.
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Although former national security officials agreed that the U.S. should consider outbound investment review restrictions, they panned a congressional proposal that would have granted a new interagency committee “sweeping” power to restrict capital flows to China. Speaking during a House Financial Services Committee hearing this week, some of the former officials said Congress should rethink the proposal and also urged the Biden administration against issuing a unilateral executive order to establish an outbound investment review regime.
DOJ’s new corporate enforcement policies substantially increase compliance incentives and may lead to more voluntary self-disclosures, law firms said. But they also said much of the new policy will depend on how DOJ implements the changes, and it remains unclear how much of a downstream impact the revisions will have on export control and sanctions cases handled by other agencies.
A Miami-based company violated U.S. export regulations when it illegally shipped red dot scopes to Austria and Switzerland, the Bureau of Industry and Security said in Feb. 2 order. The company, Dotphins, entered into a settlement agreement with BIS that will require it to complete compliance training.
The Bureau of Industry and Security will hold a two-day conference this month to help it better understand emerging brain computer interface (BCI) technology as it considers potential export controls. The public conference, which will be both in person and virtual Feb. 16-17, comes a little more than a year after the agency requested public comments on potential BCI export restrictions (see 2110250011).