The Bureau of Industry and Security this week suspended the export privileges of five people, including four for illegal exports of guns or ammunition and one person for illegally exporting services to North Korea.
The Biden administration’s upcoming executive order on outbound investment is “likely to be coming in the next few weeks,” said Jeannette Chu, vice president for national security policy at the National Foreign Trade Council. Chu, speaking during a May 11 Materials and Equipment Technical Advisory Committee meeting, said she expects the new screening tool to be unveiled around or soon after the G-7 meetings in Japan next week.
The Bureau of Industry and Security needs much more funding to carry out its export control work, lawmakers and former officials said during a House hearing this week. Kevin Wolf, a former senior official at BIS, said Congress should consider doubling -- perhaps quadrupling -- the agency’s resources.
A former Pentagon official expected to testify before Congress May 11 said U.S. officials for years have “refused” to fix failures in its export control system that allow China to acquire sensitive technologies. Stephen Coonen, who spent nearly 14 years in the Defense Technology Security Administration, including as its senior foreign affairs adviser for China, said he resigned from the agency in 2021 to protest the Bureau of Industry and Security’s “willful blindness” surrounding its export policies.
Although Taiwan Semiconductor Manufacturing Company last year secured a one-year authorization to continue certain China-related activities despite the Commerce Department’s October chip controls, the company has “no assurance that we will be able to continue securing such general authorization on a timely basis or at all,” it said in an April Securities and Exchange Commission filing. The Bureau of Industry and Security recently said it’s working with some companies to allow them to continue certain activities authorized by the waivers after they expire (see 2302240008).
Although the U.S. continues to impose new sanctions and export controls against Russia, the Commerce Department’s $300 million penalty assigned to Seagate Technologies last month signals that the U.S. is increasingly prioritizing enforcement, particularly against China, law firms said this month. They also said the fine shows that Commerce is looking to strictly enforce its foreign direct product rule restrictions, even for violations of the rule that may not be obvious.
U.S. export controls and investment restrictions can successfully maintain America’s lead over China in sensitive technologies, including semiconductors, said Michele Flournoy, a former Defense Department official. But she also warned against policies that could push the U.S. toward decoupling from Beijing, saying the government needs to do a better job working with industry to craft the restrictions.
The Bureau of Industry and Security this week revoked the export privileges of two people after they were convicted of smuggling weapons and ammunition from the U.S. to Mexico.
Placing export controls now on quantum information science technologies likely would “cause more harm than good,” Sam Howell, a research assistant with the Center for a New American Security, said in a May 1 article for the Lawfare blog. Although the U.S. could take several paths in imposing quantum technology restrictions -- including specific end-user controls or broader restrictions targeting “entire integrated quantum systems” -- she said each carries “significant pitfalls and are unlikely to be effective in protecting the U.S.’s strategic edge at this stage of development.”
U.S. hardware supplier MaxLinear said it submitted a “comprehensive” voluntary self-disclosure to the Bureau of Industry and Security in March detailing its potential illegal exports to a Chinese foundry on the Entity List. The company, which submitted an initial notification to BIS last year (see 2211070014), has since hired outside counsel who recently completed a “privileged investigation” of the potential violation, according to its April filing with the SEC. The company also “took immediate action to remediate, including by preventing recurrence.”