It’s been a turbulent year in export controls and sanctions, as some nations have faced heavier sanctions, others have seen them removed and China has flexed its muscle on controls around the export of critical minerals.
The major story this year has been the pact between Australia, the UK and US (AUKUS). Earlier this month, US Secretary of State Marco Rubio endorsed AUKUS after a long review of the agreement, which was first struck under the Biden administration. Rubio affirmed that the US is seeking a “full steam ahead” approach.
The commitment to AUKUS represents the first time in a very long time that the US has actually reduced the amount of red tape, particularly around International Traffic in Arms Regulations (ITAR) licences.
In an unexpected move, this AUKUS agreement is going to see a number of nuclear-powered submarines built between the UK and US for and on behalf of the Australian government with its own ITAR licence, 126.7 meaning it should be much easier for firms involved in this specific programme to move goods around between the three nations.
There are still export controls in place, but they’ve removed a lot of the red tape for companies that are involved in that programme.
Some 15,000 American companies, 900 Australian companies and 300 UK companies stand to benefit from the change.
The AUKUS commitment also plays into the US’ approach to critical supply chains, particularly those on rare earths, where the North American nation and Australia recently signed a new agreement.
Reuters reported last week that China’s exertion of control over global supply of rare earths – it processes 90% of the world’s processing of the minerals – has forced one in three European firms to shift away from China as a source.
Over 40% of respondents to a flash survey by the EU Chamber of Commerce, meanwhile, said China’s commerce ministry is processing export licences more slowly than it has promised.
The sanctions story continued this year, as the US dialled up some sanctions on Russia while offering relief to Belarus and Syria on others.
The Trump administration made good on suggestions that it would hit Russia with sanctions on its oil, with new measures hitting major Russian oil firms Rosneft and Lukoil towards the end of October. Russian oil and gas revenues are estimated to have fallen by a third year-on-year in November as result, with purchases from Turkey, India and Brazil all seeing a drop.
The US Treasury said on announcing the sanctions in October that it’s prepared to take further action if necessary to bring the Russia-Ukraine war to a halt, and Bloomberg reported on 17/12 that the US is readying a new package of sanctions on Russia’s ‘shadow fleet’ of oil tankers, as well as on those who facilitate financial transactions for its oil exports.