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US Proposes Criminal Charges Against SMIC Executives

This blog post delves into the details of the bill, outlining severe sanctions on prominent companies like SMIC and Huawei, the revocation of existing licenses, and the pursuit of criminal charges against their executives.
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Introduction:

In recent times, the United States has been unwavering in its commitment to safeguard sensitive technologies, preventing their misuse by malign actors. Concerns about the People’s Republic of China (PRC) and its possible violation of U.S. technology controls have prompted the U.S. Department to act swiftly and strategically against SMIC, China’s largest fabrication facility.

The Foreign Affairs Committee has laid out a series of vital actions designed to strengthen the current framework, safeguarding national interests. This blog post explores these proposed measures and their potential consequences.

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Action Items Proposed by the Foreign Affairs Committee:

Establishment of Sanctions Authority:
The proposal suggests creating a sanctions authority under the International Emergency Economic Powers Act targeted at PRC companies like SMIC and Huawei that may be violating U.S. technology controls. Leveraging this authority to impose full blocking sanctions would exert significant pressure on these entities.

Strategic Bar on Semiconductor Imports:
Under the authorities granted by 19 U.S.C. § 1864, there’s a recommendation to strategically prohibit the import of semiconductors produced by SMIC, particularly those posing risks to national security. This measure aims to choke off potential threats at the entry point.

Entity Listing with FDPR Designation:
SMIC and Huawei, along with their subsidiaries, are proposed to be placed on the Entity List, backed by a Foreign Direct Product Rule (FDPR) designation. This restrictive measure intends to limit their access to sensitive technologies.

Policy of Denial for Huawei:
A policy of denial for all items subject to the Export Administration Regulations (EAR) for Huawei and its subsidiaries is advised. This would effectively restrict the export of crucial technologies to these entities.

Comprehensive Policy of Denial for SMIC:
Likewise, there’s a suggestion for a comprehensive policy of denial. This would cover all items under the EAR related to SMIC, not just those below 14nm. The objective is to mitigate potential risks linked to semiconductor technologies.

Revocation of Existing Licenses:
Furthermore, there’s a recommendation to revoke all existing licenses for SMIC and Huawei. This underscores a rigorous control approach in exporting sensitive technologies.

Pursuit of Criminal Charges:
Pursuing criminal charges against executives from SMIC and Huawei is recommended, underlining the gravity of non-compliance with U.S. export controls. These actions could potentially impact other players in the semiconductor industry, including Lam Research, KLA, Applied Materials, and others.

Read more: China Defies US Sanctions with World’s Most Powerful Radar Chip

Conclusion:

The proposed actions emphasize the need for strong controls on sensitive technology exports, especially due to evolving national security threats. They are proactive steps to fortify the current framework. It’s crucial to carefully consider potential consequences and collaborate with government departments for effective implementation. Balancing technology advancement with national security is a top priority for the United States, necessitating a comprehensive and strategic approach.

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