China hawk: Fix symbolic, ineffective US sanctions – Asia Times

According to a Trump-era US industry standard who was known as the” China hawk,” the Trump administration should tighten its restrictions and export controls against China, which are currently insufficient to prevent Chinese companies from exporting dual-use goods to Russia and using American technology.

Nazak Nikakhtar believes that sanctioned organizations can easily be evaded because they can conceal themselves by starting layers of shell companies or just owning a majority interest in their businesses.

Nikakhtar, who from 2018 to 2021 was assistant secretary for industry and analysis at the US Department of Commerce’s International Trade Administration ( ITA ), spoke with Asia Times in an interview.

Nazak Nikakhtar, a companion in the Wiley Rein LLP’s global trade process, is shown in this photo. waller. rules

She suggested that US President Donald Trump impose” regional restrictions” on those who supported the Ukrainian military. &nbsp, &nbsp,

” Folks can establish document companies to avoid US sanctions,” the statement read. However, if we apply sector-specific sanctions to our SDN List [Specially Designated Nationals and Blocked Persons List], it will become a little challenging, according to Nikakhtar, who is now the head of the fund’s national security process and is a companion in the global business practice at the British law firm Wiley Rein LLP.

She said that targeting financial corporations would have a “broader financial impact.” The banks should be raised by the phrase “if a paper business suddenly deals with tens of millions of dollars of purchases over.”

She claimed that these crimson flags allow the US government to recognize cautious businesses.

Regional restrictions

The US Treasury Department’s Office of Foreign Assets Control ( OFAC ) released the Sectoral Sanctions Identifications List ( SSI List ) in July of 2014 and added prominent figures from Russia’s financial and energy sectors to it. &nbsp, &nbsp,

Since the Ukrainian War started in February 2022, the SSI List has grown tremendously. Restrictions apply to businesses whose lot bets are owned by those on the SSI List directly or indirectly. Some Russians and Chinese citizens have also discovered ways to evade US restrictions. &nbsp,

According to Nikakhtar, the current US sanctions against Russia and China were very narrow and incremental, giving them the opportunity to create systems that would withstand them. &nbsp,

Given that we do n’t usually punishment many Chinese businesses, the Biden presidency feels like it has made a major shift in this regard,” she said. ” Do these things matter? Symbolically, yes. Do they, however, have any deterrent effects when used in a manner that deters human use? No”.

According to her,” the US government really needs to consider an alternative strategy because current methods are not punishing but ultimately weaken our capacity for sanctions.”

Washington has sanctioned about 1,500 Chinese businesses since a trade war between the US and China in 2018 and accused them of supporting Moscow’s military in Ukraine, violating international human rights, providing products to the People’s Liberation Army with high-tech products, and launching cyberattacks. &nbsp, &nbsp,

These sanctions were imposed following lengthy investigations. After Russia fired 136 suicide drones at Ukrainian troops using Iranian-made Shaheds in August of this year, the Bureau of Industry and Security ( BIS ) of the US Commerce Department identified and sanctioned three Hong Kong businesses that supplied the drone parts.

Sanctioning Chinese banks

Treasury Secretary Janet Yellen said that if Chinese financial institutions were involved in shipments that increased Russia’s military might, the US could impose sanctions on them. &nbsp,

Four more Chinese banks recently stopped accepting payments from Russia, according to a report in the Russian newspaper Izvestia on April 12 after three of the world’s largest Chinese banks did the same in February. &nbsp,

A US official told Reuters on April 22 that the country had no immediate plans to impose sanctions on Chinese banks.

Nikakhtar claimed that China’s current de-dollarization plan has remained stalled due to its own economic issues, making the threat of sanctioning Chinese banks a real risk.

She said,” I would advise any administration to avoid using traditional methods, but instead consider combining multiple methods to achieve the best impact,” noting that the import restrictions and tariffs are two other examples. &nbsp,

She claimed that” the government has a lot of information” about how Russian and Chinese people trade. It has the authority to impose sanctions on both those who may be indirectly involved in the transactions and those who are significant and significant enough to have a significant economic impact on the Chinese economy.

For example, she said, if any Chinese automakers are found to have supported Russia’s war efforts by supplying Moscow with their armored vehicles, they should be sanctioned. &nbsp,

” By rethinking how we use sanctions and other tools, we could still proceed narrowly, but having a bigger and more significant economic impact”, she said. The US government does n’t seem to be comfortable with stepping back, I believe.

In fact, Washington has recently expanded the scope of its sanctions against Chinese businesses. &nbsp,

Gold bars. Photo: Wikimedia Commons

VPower Finance Security, a Hong Kong-based logistics service provider, was sanctioned by the US Treasury Department on June 12 for allegedly helping to transport Russian-origined gold, which had been sold to some businesses in the UAE and Hong Kong, into fiat money and cryptocurrencies. VPower’s clients include big Chinese banks, retail brands and the Hong Kong government. &nbsp,

Chip export controls

In an effort to reduce China’s chip industry, the Biden administration has tightened its export controls over the past few years. &nbsp,

However, according to reports in the media, China can still purchase expensive US chips from smugglers or third countries, and Semiconductor Manufacturing International Corp ( SMIC ) used deep ultraviolet lithography last year to create 7 nanometer chips. In recent years, the nation has also updated its electronic design automation ( EDA ) software. &nbsp,

On March 29, the US revised its export control regulations to make it harder for China to import US-made artificial intelligence chips and chips.

The US government should consider where it is going if 90 % of certain chips ‘ exports were traditionally made in China but now are made there through a third nation without any industry to support that kind of volume, Nikakhtar said. &nbsp,

” Before it provides license authorizations, the US government can start looking at parties involved in the financial transactions, their banks, beneficiaries and account holders”, she said. It can initially license a very small amount of trade before sending it to the end-use-checkers to check the legitimacy of each institution before granting more licenses.”

She noted that the US government can look into a lot of red flag indicators, but regrettably, the Commerce Department’s export control unit is “very much oriented toward export promotion, rather than really regulating controls.”

She suggested that the US government should deregulate its export regulations for allies and establish a roadmap to restructure its chip supply chain at the same time. &nbsp,

” China has the majority of chip’s end users. What should we do while the US government tries to break the supply chain out of China? Can semiconductors be exported to other countries? How long will it take to build out that? What will happen to companies ‘ revenue in the meantime”?

Nikakhtar added that the US government’s evaluation of China’s technological prowess is currently a little superficial, underestimating the abilities of Chinese engineers. &nbsp,

She said,” An overestimate the other side to have a stronger policy is a country’s responsibility,” so that it can always have a stronger policy. &nbsp,

Read: Chinese EV firms can absorb EU tariffs: expert

Read more: Hong Kong exports rebound despite the Sino-US trade war

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