U.S. National Security Focus on Russia and China Drives Enforcement Actions and International Cooperation

Driven by shared attention toward Russia and China, U.S. federal agencies are increasingly looking to coordinate with counterparts in countries the United States views as its allies and partners on national security priorities. An emerging nexus between economic, technological, and security policy, in addition to human rights concerns, has led to a patchwork of mutually reinforcing sanctions, export controls, and anti-corruption regimes. This recent multilateral cooperation could provide a roadmap for future coordinated action and coalition-based responses to other major geopolitical developments.

Interagency and Multilateral Coordination

Russia’s war in Ukraine led to unprecedented multilateral action to cut off Russian oligarchs, allies of the regime, and third-country facilitators from global markets and prevent Russia from acquiring sensitive dual-use technologies and other weapons. As an October 2022 joint U.S. interagency alert indicates, the United States worked swiftly with its allies and partners to impose costs on the Russian regime through economic sanctions and export controls. It has continued to do so in recent months, and plans to implement a joint price cap on Russian oil beginning December 5 along with a coalition of countries that includes the G7, the EU, and Australia.

Human Rights in Focus

In addition to furthering traditional national security priorities, the U.S. government has increasingly turned to trade sanctions to address human rights concerns, particularly in relation to allegations of widespread forced labor in certain countries or regions. Although the Treasury Department has previously employed financial sanctions to target human rights offenders under the Global Magnitsky Act of 2016, the United States is now utilizing import and export restrictions for the same purpose and some U.S. allies appear to be following suit.

Notably, U.S. agencies have increasingly come under pressure from the Congress to address the alleged human rights abuses in China’s Xinjiang-Uyghur Autonomous Region. Signed into law in December 2021, the Uyghur Forced Labor Protection Act ("UFLPA”) builds upon the existing mandate of the U.S. Customs and Border Protection (“CBP”) agency, under the Tariff Act of 1930, to bar the importation into the United States of goods allegedly made using forced labor, and establishes a rebuttable presumption that goods mined, produced, or manufactured wholly or in part in Xinjiang, or by certain listed entities, were made using forced labor and are thus barred from entering the United States. U.S. officials have also engaged with EU and Canadian counterparts to discuss the implementation of similar measures in their jurisdictions, with the European Commission proposing such a measure in September of this year.

The Tech-Security Nexus

U.S. regulators have increasingly viewed national security priorities through the lens of technology and, as a result, have increasingly coordinated multilateral polices with a tech-oriented focus. Export controls, which have historically been employed to prevent the transfer of dual-use technologies with military applications, are now focused on safeguarding a wider range of critical technologies, including semiconductors and advanced computing. In addition, the U.S. Congress has introduced a bill that could result in the creation of an outbound investment regime that would prevent U.S. persons from investing in certain sectors of identified “countries of concern.”

Looking Ahead New Congress Brings Heightened Scrutiny on China

The newly elected U.S. Congress will likely bring heightened scrutiny of China through congressional investigations and oversight. Congressional leadership has already signaled that it expects robust enforcement from the Bureau of Industry and Security on export controls related to China. Leadership from both parties in the Senate have also called on the House of Representatives to provide funding for more robust enforcement of UFLPA. Time will tell whether this results in more coordinated multilateral action or more of a ‘go it alone’ approach in U.S. China policy. In the interim, multinational financial institutions and corporate entities will face a complex patchwork of regulatory regimes focused on national security issues.

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