China Trade Controls

As the White House continues to try to slow the growth of Chinese advanced supercomputing and information/communications sector technology, as well as proposed rules to tighten biotechnology tech transfers to China, what can industry expect around China trade policy here forward, post-election, as US/China trade tensions continue to evolve?

• Leveraging joint ventures to maintain select China operations
• What are the business thresholds for maintaining China operations?
• What are the impacts of China’s US export control/sanctions countermeasures on businesses in China: The relationship between The Anti-Foreign Sanction Law, Unreliable Entity List and the Blocking Order
• Completing the factual and legal due diligence and analysis needed to achieve clarity about the status of your business with China under international trade restrictions

Using hypothetical scenarios and audience feedback, this session will delve into the most vexing grey areas and compliance pain points

FDPR:

• Avoiding key pitfalls when applying the FDPR
• Foreign Direct Product Rule (FDPR)/advanced computing export controls rules
• de minimis threshold decision-making
  • Examine necessary tools your peers are using for when your compliance teams are stumped by:
    • Impacts of the FDPR rule: How do you tighten up compliance oversight around third-party due diligence procedures?
    • Conducting gap analysis: Updating your compliance program protocols to make sure legal, engineering, and trade compliance are all in the loop
    • What constitutes “controlled content”
    • Ineligible items for de minimis
    • Standardized methodologies of calculations, documentation, record and communication
• Employee training and monitoring
  • Understanding internal processes that lead to the export transaction: Working with all teams involved including development, fulfillment, logistics, finance and IT
  • Has the company provided tailored training for high-risk and control employees?
  • What resources have been available to employees to provide guidance
• Conducting gap analysis: Updating compliance programs to make sure legal, engineering, and trade compliance are all in the loop with new controls
• Third-party management
  • Developing a model that stratifies your risk based on third parties — and how to perform due diligence accordingly
  • What to do with information uncovered during the vetting process: How to evaluate red flags

Businesses will need to keep a closer eye on their digital supply chains if they want to steer clear of looming government oversight and enforcement as part of a U.S. government push to secure the information and communications technology (ICTS) infrastructure from exploitation by foreign adversaries. The latest ANPRM now also brings connected vehicles (CVs) technology under the ICTS microscope. How is industry screening, or preparing to screen, such technology transactions out of their existing supply chains?

This session will feature current corporate executive insights into current supply chain risks amid increased cyber hazards, the Bulk Data EO, evolving advanced computing restrictions as well as anticipated increased technological restraints in a tense geopolitical environment.

• Key Elements: CCMC, MEU, MIEU
• How industry is updating screening, compliance policies and procedures around MEU, MIEU and CMIC regulations: What are best practices?
• Getting previous Returned Without Action (RWA) notices approved:
  • Hypothetical Scenario: What do you do if a customer’s subcontractor ends up on the MEU list, even if they have no military intent? How do you prove to BIS that this subcontractor will avoid military activities to get your RWA approved?
• License applications, approvals, and denials: What are the lessons learned from ever-evolving trends?
• CMMC, MEU, MIEU due diligence tools:
  • Development of a Heat Map to focus on risk-based compliance
  • Preparing questionnaires to help the business flag risk areas based on likely business opportunities
  • Leveraging relationships in countries where business opportunities are likely to arise
• Beneficial owner screening:
  • Screening for the customer and any entity with a 50% or greater ownership interest
  • Best practices around screening all significant shareholders (5% or more) and the company’s Directors and Officers
• Resources beyond screening:
  • Open-source research: Conduct searches of each end-user to verify and confirm business relationships and dealings
  • Questionnaires
• Common practice includes sending questionnaires regarding the use of products, requests for org charts, and end use certificates
• End Use Certification: Customer confirmation of their anticipated end use of the product
• End User Questionnaire: Exporters should conduct due diligence to determine an entity’s ownership, business background, and intended use of product