The U.S. should better regulate the cryptocurrency industry to increase sanctions compliance, but not in a way that inhibits innovation, companies and trade groups told the Treasury Department in comments released this month. Some commenters said Treasury should issue more guidance to help firms better understand their compliance obligations and help digital assets from being used to evade global sanctions.
The Federal Maritime Commission is seeking public comments on whether it should issue an emergency order requiring carriers and terminal operators to share new information with shippers on “cargo throughput and availability.” The FMC said it can issue the potential emergency order -- using an authority granted to it by the Ocean Shipping Reform Act -- if it determines that supply chain congestion has created “an emergency situation of a magnitude such that there exists a substantial, adverse effect on the competitiveness and reliability of the international transportation supply system.” Comments are due Sept. 14.
The Bureau of Industry and Security last week announced new export controls on four technologies that can be used to produce advanced semiconductors and gas turbine engines. The controls, which were agreed to by members of the multilateral Wassenaar Arrangement at last year’s plenary, will apply to two substrates of ultra-wide bandgap semiconductors, certain Electronic Computer Aided Design (ECAD) software and certain pressure gain combustion (PGC) technology.
The Committee on Foreign Investment in the U.S.’s annual report to Congress (see 2208020043) shows CFIUS is reviewing record numbers of investments and sheds light on how the Biden administration is approaching screening efforts, especially surrounding Chinese companies, law firms said. The report also indicates that companies should expect even more government scrutiny of foreign direct investments in coming years, firms said, including for non-notified transactions.
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The Treasury Department’s designation of a virtual currency mixer this week was a significant step toward combating financial cyber crime, and could lead to more effective actions against cyber criminals, including those operating out of North Korea, former FBI analyst Nick Carlsen said, speaking during a Center for a New American Security event this week. Carlsen also said the U.S. should work closer with South Korea, including through sanctions coordination, to better target North Korean financial crime.
The Treasury Department’s Financial Crimes Enforcement Network should establish a no-action letter process, industry groups said, which would help provide better compliance guidance to banks and lead to better reporting. No-action letters, which are used by other enforcement agencies to indicate their intention not to take enforcement action against a party submitting a disclosure, could significantly improve industry’s understanding of FinCEN regulations and reduce compliance risks, the groups said.
The Bureau of Industry and Security this week charged a Chinese company with violating U.S. export controls when it helped Zhongxing Telecommunications Equipment Corporation sell controlled items to Iran. The company, Far East Cable, served as a “cutout” between ZTE and several Iranian telecommunications companies, BIS said, helping ZTE “conceal and obfuscate” its business dealings in Iran from U.S. investigators. In total, BIS said Far East Cable committed 18 violations of the Export Administration Regulations.
The U.S. should transform the Committee on Foreign Investment in the U.S. into a new Commission on Foreign Investment and National Security, which would improve transparency and reduce uncertainty around investment reviews, Morgan Lewis lawyers said. Although the process of standing up a new government commission and issuing regulations may be “arduous and expensive,” the lawyers say the benefits will outweigh the costs.
Although the U.S. and its allies should form a new multilateral export control regime that could be used to penalize Beijing if it invades Taiwan (see 2206100021), it remains unclear how many allies would be willing to go along with new China sanctions, panelists told a congressional commission this week. Some countries in Europe and Asia may have an interest in joining together to deter Beijing, the experts said, but imposing severe multilateral export controls against China would be more challenging than imposing similar measures against Moscow.