As Biden Searches for BIS Leader, Policy Direction Remains Unclear

There's no consensus on a choice for the next undersecretary, according to people familiar with the discussions, who spoke on condition of anonymity. The post has traditionally been held by an official with a strong law background and a firm grasp of the Export Administration Regulations, and industry representatives and some former Commerce officials say that familiarity remains a priority. Others, including lawmakers and former Trump administration officials, are pushing for a candidate with more national security expertise and a hard-line approach toward U.S. technology exports to China.

“People seem to be worried about the direction of BIS based on who the head is going to be,” said Nazak Nikakhtar, a trade lawyer who served as BIS’s acting undersecretary in 2019. “Is it economic interests before national security interests, or is it a head that’s going to be really leveraging national security interests before economic interests? Or is there going to be a candidate who will walk those two lines?”

At least two people are viewed as candidates for the role, including James Mulvenon, considered a China military expert at the aerospace company SOS International, and Kevin Wolf, an export control lawyer and former senior BIS official (see 2102120034 and 2103310032). Wolf said he doesn’t know who is being considered or if interviews have begun. Mulvenon didn’t respond to a request for comment.

Wolf has been criticized by China hawks for his ties to industry and his work to help clients obtain export licenses to sell to China. Some former officials and export control lawyers dismissed that criticism and believe that isn't a concern of the Biden administration. “China policy is going to be made by the President,” said Bill Reinsch, who was a senior export administration official during the Bill Clinton administration. “What you need at BIS is somebody that can rally the troops to operate efficiently, write regulations that are clear and will withstand judicial scrutiny and have a working relationship with industry.”

While both Wolf and Mulvenon have supporters, the ideal candidate may be a mix of both, former officials said -- someone with an extensive export control background who is intimately familiar with national security issues and closely aligned with the U.S.’s increasingly competitive outlook toward China. “The person is really going to have to hit the ground running,” said Peter Lichtenbaum, an export control lawyer and former senior BIS official. “There’s not going to be a lot of time for somebody to learn this system.”

The delay in appointing a nominee has contributed to the agency’s leadership void, some former officials warned. Although companies and industry officials have praised the efforts of Matt Borman, BIS’s deputy assistant secretary for export administration, they also warn he is overburdened and said the agency hasn’t had a confirmed undersecretary since 2018. “As long as smart people are there, they can manage,” said Reinsch, a trade adviser and expert at the Center for Strategic and International Studies. “But the place is really kind of emptied out of senior managers.”

Without a confirmed BIS undersecretary, the National Security Council may struggle to communicate and translate its policies into concrete moves at BIS, which could slow the agency down, former Commerce officials said. Some former officials said the issue was more pronounced under Donald Trump's administration, when export control actions were published at a rapid pace. But it could again become an issue the longer the agency goes without a confirmed leader. “They would get these demands from the White House to do this or that, and then they had to try to translate it into regulation that can stand up against litigation,” Reinsch said. “The career people -- who are very, very good -- have just soldiered on.”

The next undersecretary will have a host of complex issues to address on day one, including BIS’s mandate under the Export Control Reform Act of 2018, which requires the agency to place export controls on emerging and foundational technologies. BIS has been criticized by lawmakers and government commissions for moving too slowly -- the agency has issued about 40 emerging technology controls so far but has yet to place an export restriction on a foundational technology (see 2010010020 and 2103030057).

Congress is mulling whether BIS is the right agency to lead the effort. The House’s Republican-led China task force last year threatened to take the responsibility under ECRA away from BIS (see 2010010020), a threat some lawmakers are still considering, according to a Republican aide involved with the discussions. Lawmakers are also looking at whether they can alter the process under ECRA to expedite a potential control list, the aide said, and are disappointed that the agency has made little progress on foundational technologies aside from publishing an advance notice of proposed rulemaking in November (see 2008260045).

BIS, which didn't comment for this story, has previously pointed to its list of emerging technologies as progress and has said the foundational technology effort is proving challenging (see 1910290062). But the pressure from Congress remains. “The shifting congressional opinion about China in a sharply negative direction has really complicated what they do,” Reinsch said.

Lawmakers aren’t the only group vying for influence at BIS: More than 50 technology companies, industry groups and universities have written to BIS over the past year, pleading for the agency to avoid placing overbroad controls over whole categories of technologies, such as artificial intelligence and quantum computing (see 2012230069, 2104060045, 2011020057 and 2012020044). “When technologies are truly emerging, it’s very difficult to identify what should and shouldn’t be controlled and to where,” Nikakhtar said. “BIS is in an understandably tough spot.”