The U.S. should impose sanctions against China for allowing its companies to continue to supply semiconductors and other dual-use technologies to Russia, said Sen. Bob Menendez, chair of the Senate Foreign Relations Committee. Although the U.S. has penalized specific Chinese companies for supplying Russia -- including new sanctions this week -- Menendez said he wants to see a more “robust” set of measures.
The U.S. should double down on its resources, oversight and enforcement to prevent Russia from acquiring semiconductors and other dual-use goods used to power its war against Ukraine, the Silverado Policy Accelerator said in a report this week. If the broad Western export controls against Russia aren’t followed up with strict enforcement, the think tank said, Moscow will continue to find ways to import chips, including from China.
ASML, the Netherlands’ flagship semiconductor company, said it saw higher-than-expected fourth quarter revenue and expects a 25% increase in net sales this year despite challenges caused by existing and potential future export controls against China. The company also declined to predict whether the Netherlands will join the U.S. in imposing similar chip export restrictions but warned that broad controls could severely damage the semiconductor industry.
The Federal Maritime Commission will amend its proposed rule on unreasonable carrier conduct (see 2209130040), after industry, lawmakers and at least one federal agency said the rule was too broad, missed congressional intent and didn’t go far enough to address carriers that refuse to carry exports in favor of imports. The commission plans to issue a “supplemental notice of proposed rulemaking” to incorporate changes to the rule, FMC Chair Daniel Maffei said during a Jan. 25 commission meeting, adding that he hopes to publish the updates “as quickly as possible.”
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The State Department last year limited its new open general license pilot program to defense reexports and retransfers because of a database issue with CBP, and may eventually look to expand the authorization to include regular exports, said Dilan Wickrema, an official with the Directorate of Defense Trade Controls. “Frankly, the reason why we haven't been able to include exports into an OGL yet is because we would have to amend CBPs database to allow and accept some kind of code indicating that an OGL was used,” Wickrema said.
The U.S. should take more steps to counter corruption and sanctions evasion efforts by Russian kleptocrats, including through a new multilateral anti-corruption council, Sen. Sheldon Whitehouse, D-R.I., said this week. While he applauded recent funding passed by Congress to provide more resources for government enforcement efforts, he said lawmakers have more work to do to close sanctions loopholes.
Although the State Department is working to better streamline its export licensing process, the agency is facing increasingly complicated licensing decisions and a large volume of applications, said Sarah Heidema, policy director for the Directorate of Defense Trade Controls. She said DDTC has “thousands of licenses pending adjudication” at “any given time,” and some require extensive analysis.
Compliance with a new country of origin (COO) reporting requirement in the Automated Export System would be difficult for smaller and occasional exporters, many of which would likely have to develop new processes to report that information, the National Customs Brokers & Forwarders Association of America told the Census Bureau. The NCBFAA urged Census to research whether it can collect that COO information from other sources before it decides to move forward with the proposal.
The G-7 price cap on Russian oil, along with other trade restrictions, appears to be having a significant impact on the global price of Russian energy, experts said during an event hosted by the Center for Strategic and International Studies last week. But they also said it remains unclear whether the cap is limiting Russia’s export volumes and said it’s too early to tell how well industry is complying with the cap’s service restrictions.