The Bureau of Industry and Security is being asked to do more to restrict the export of dual-use items but isn’t getting a commensurate increase in funding and personnel, a technology policy expert said last week.

The Bureau of Industry and Security fined multinational chip maker GlobalFoundries $500,000 after it illegally exported semiconductor wafers to a Entity Listed firm with ties to Semiconductor Manufacturing International Corp. (SMIC), China’s flagship chip manufacturing company.

U.S. export control efforts -- along with enforcement risks for companies -- will continue to rise no matter who wins the upcoming presidential election, said Matthew Axelrod, the lead export enforcement official at the Bureau of Industry and Security.

House Foreign Affairs Committee Chairman Michael McCaul, R-Texas, is “glad” the Biden administration is moving forward with a final rule that will restrict U.S. outbound investment in China’s AI, quantum and semiconductor sectors, a spokesperson for the committee’s majority said Oct. 30.

The U.S. this week unveiled new trade and financial restrictions against people and companies across more than 17 countries for helping Russia evade sanctions or for supporting the country’s military, adding nearly 400 to the Treasury Department’s sanctions list and more than 40 to the Commerce Department’s Entity List. Another move by Commerce will tighten existing controls on nearly 50 entities that it said are procuring U.S.-branded microelectronics for Russia.

The Treasury Department's new final rule for outbound investment received mixed reviews from Congress this week.

The leaders of the House Select Committee on China urged the Commerce Department this week to prevent American know-how and investment from supporting the development of China’s photonic semiconductor sector.

The Treasury Department's new outbound investment rules will officially take effect Jan. 2, creating new prohibitions and notification requirements to limit certain U.S. business activities in China’s semiconductor, artificial intelligence and quantum sectors. The 297-page final rule, released in pre-publication form Oct. 28, adopts many of Treasury’s proposed regulations issued in June (see 2406210034) with a host of notable tweaks and clarifications, including a more detailed description for the rules’ AI investment threshold and insight into the agency’s due diligence expectations for U.S. companies.

The U.S. government could face a host of challenges if it tries to place export controls on AI models to protect national security, the Center for European Policy Analysis (CEPA) said in an article last week.

The Treasury Department issued a pre-publication version of the final regulations for its outbound investment program, which will set new prohibitions and notification requirements to limit certain U.S. business activities in the semiconductor, artificial intelligence and quantum sectors of mainland China, Hong Kong and Macau beginning Jan. 2. The final rule, released Oct. 28, adopts many of the regulations proposed by the agency earlier this year along with a host of notable tweaks, clarifications and refinements, including a more detailed description for the rules’ AI investment threshold, insight into the agency’s due diligence expectations for U.S. companies and updates to the scope of exempt transactions.