The State Department’s Directorate of Defense Trade Controls is preparing to publish several new export control rules, including one that will request feedback on U.S. Munitions List categories and another that will consolidate exemptions under the International Traffic in Arms Regulations. DDTC is also starting to review a more complex set of Ukraine-related export licenses after moving through some of the more straightforward applications earlier this year.
The Bureau of Industry and Security on June 30 announced several policy changes designed to strengthen its administrative enforcement tools and penalties. Under the changes, outlined at the agency’s annual update conference by Matthew Axelrod, the agency’s top enforcement official, BIS will raise penalties for more serious violations; revise its policies surrounding its no-admit, no-deny settlements; begin offering settlement agreements that don’t include fines; and revise how the agency processes voluntary disclosures.
The Bureau of Industry and Security this week announced a new initiative to improve the agency’s outreach to universities. The plan, outlined in a June 28 memo to export enforcement officials, is aimed at prioritizing outreach at universities that have an “elevated risk profile” and bolstering export control training at those schools. BIS also plans to assign dedicated agents to certain schools and conduct more “background briefings” with researchers on national security and technology risks.
The U.S. needs to create some type of outbound investment screening regime, Bureau of Industry and Security Undersecretary Alan Extevez said, adding that the agency is working with Capitol Hill to shape how a regime would work. A bipartisan group of lawmakers proposed a bill this month that would create an outbound screening tool (see 2206140048), and Estevez said the Commerce Department and other agencies are “obviously providing opinions” to lawmakers.
Although the U.S. and allies are discussing creating a new multilateral export control framework, it’s too soon to tell whether those talks will result in a formal regime, said Alan Estevez, undersecretary of the Bureau of Industry and Security. He said the group of countries has “momentum” toward a new framework, but they haven’t yet agreed to establish a formal organization to replace some of the existing multilateral regimes, such as the Wassenaar Arrangement.
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If the U.S. establishes an outbound investment screening mechanism, it could struggle to coordinate the measure with the EU and possibly other partners, experts said. Nargiza Salidjanova, director of the Rhodium Group’s China practice, said the proposal being considered by Congress may be too broad for the EU.
The U.S. this week announced a host of new sanctions targeting Russia’s defense industrial base, including export restrictions against entities helping Moscow evade U.S. export controls and new financial sanctions targeting state-owned companies. The sanctions target more than 100 entities and 50 people supporting Russia’s defense industry and add 36 entities to the Commerce Department’s Entity List, including six for supporting Russia’s military.
The Commerce Department published its spring 2022 regulatory agenda for the Bureau of Industry and Security, including two new mentions of rules that could result in new emerging technology export controls.
The U.S. and other G-7 member states plan to soon announce a host of new sanctions and trade restrictions against Russia, including new restrictions targeting Russia’s industrial and technology sectors. The countries also plan to announce enforcement actions relating to Russia’s sanctions evasion efforts, which will include new additions to the Commerce Department’s Entity List.