Export Controls

"Don't try to bullshit a bullshitter," admonished Chairman Brian Mast (R-FL), as Assistant Commerce Secretary for Export Administration Thea Kendler responded to his subcommittee's questions on decision making in the Bureau of Industry and Security. Observers who thought  Oversight and Accountability Subcommittee of the House Committee on Foreign Affairs hearing "Reviewing the Bureau of Industry and Security, Part II: U.S. Export Controls in an Era of Strategic Competition," with Ms. Kendler and Assistant Secretary for Export Enforcement Matt Axelrod would inform the conversation on enforcement priorities and resources may have been disappointed December 12, as the committee's questioning centered on a deal removing China's Ministry of Public Security’s Institute of Forensic Science (IFS) from the entity list.

The Bureau of Industry and Security released a beta version of its new website in December, making changes to functionality and user experience.

Thursday, the Commerce Department’s Bureau of Industry and Security (BIS) released three rules as part of a broad effort to ease several categories of export licensing requirements and expand the availability of export license exceptions for key allied and partner countries, as well as for members of certain multilateral export control regimes.

A report by the House Foreign Affairs Committee highlights shortcomings in the U.S. export control system and calls for reforms, legislative and administrative.   Drawing extensively on the work of former Defense Department Export Control Official Stephen Coonen, the report offers a preview of the reception BIS officials can expect in next week's hearing. "Both the Trump and Biden administrations, principally from the White House, have rightly begun exerting more control over the Commerce Department’s Bureau of Industry and Security (BIS). However, no administration will be able to fully leverage the power of export controls to protect U.S. national security without Congressional action. Now, Congress must solidify the efforts of successive administrations so our future will be better secured," the authors assert. Central to the committee's findings is the concern that BIS, under the Commerce Department, has been too lenient in granting licenses for dual-use technology transfers to China, failing to adequately consider the likelihood of military or surveillance use.

Following Commerce Secretary Gina Raimondo’s call for additional funds for the Bureau of Industry and Security – the Department’s enforcement arm for export controls, Republican members of Congress called for a harder line on China first.

Tuesday, Republican members of the House Committee on Small Business wrote to Under Secretary of Commerce for Industry and Security Alan Estevez regarding the Bureau of Industry and Security’s …

The Department of State temporarily modifies the United States Munitions List (USML) Category VIII to accommodate the Korean production of their KF-21 Stealth Fighter. The Department assessed that this temporary modification does not change the export jurisdiction or classification of any existing commodities, as it only prevents the possibility of future release from paragraph (h)(1) due to use in the KF–21, which has not yet entered into production. Therefore, when the KF–21 enters production, any paragraph (h)(1) commodities authorized for export for this purpose will retain their current export classification described in paragraph (h)(1).

Defense Chiefs of the AUKUS military-industrial alliance met at the Defense Innovation Unit Headquarters at Moffett Field in  California to discuss progress for the partnership, especially Pillar II, the broad based defense industrial collaboration. The three nations are also establishing an AUKUS Industry Forum with trilateral government and industry representatives to help inform policy, technical and commercial frameworks to facilitate the development and delivery of advanced capabilities. The initial meeting of that forum will occur in the first half of 2024.  In a Joint Statement, the Secretaries and Deputy Prime Minister reaffirmed the three nations' commitment to maximize the strategic and technological advantage of AUKUS .  They agreed that advancing AUKUS requires continued commitment to streamlining defense trade controls and information-sharing while minimizing policy and financial barriers across public and private sectors.

House China hawks called for an immediate investigation of all Chinese Light Detection and Ranging (LiDAR) companies to determine whether their activities justify inclusion on US government restricted entities lists.  LiDAR technologies have broad applications in navigation and control, including autonomous systems. "Given the importance of LiDAR, it is crucial to ensure U.S. technology used in foreign LiDAR systems are not being leveraged by our adversaries to create autonomous military vehicles and weapons. Urgent action is also needed to stop LiDAR produced by state-backed entities from foreign adversary countries to proliferate in the U.S. market or gain access to U.S. capital markets or U.S. critical infrastructure systems," the lawmakers wrote.

House Committee on Oversight and Accountability Chairman James Comer (R-Ky.) joined the chorus requesting information related to the U.S. Department of Commerce’s recent decision to cease issuing new export licenses related to certain firearms, firearm components, and ammunition for approximately 90 days to certain countries.

Commerce Secretary Gina Raimondo announced plans to create an Export Control Advisory Panel “to help us get our export controls to be more effective by having a continuous engagement with industry.”   The announcement was included in her remarks to the Fall meeting of the President’s Export Council (PEC) November 29th which included a recap of AI initiatives and the announcement of a mission to the ASEAN region in March.

This briefing paper on dual-use and cyber-surveillance provides on overview of current EU export controls of dual-use items in general and cyber-surveillance items in particular, and what the approach is in countries such as the US, the UK and Japan. It explains the impact of the sanctions against Russia on the export of dual-use items and the use of cyber-surveillance in the conflict in the Ukraine.

All but three Republican Senators sent a letter to Secretary of Commerce Gina Raimondo raising questions over the decision  to pause for 90 days the issuance of export licenses for firearms, ammunition, and certain accessories to most overseas markets  The letter notes the impact this pause could have on “U.S. commercial and economic interests” which according to the firearms and ammunition industry has an estimated “direct cost of at least $89 million associated with the 90 day pause and at least $238 million annually should the pause become permanent.”

The Regulations and Procedures Technical Advisory Committee (RPTAC) will meet December 12, 2023, 9:00 a.m., Eastern Standard Time, in the Herbert C. Hoover Building, Room 3884, 1401 Constitution …

Congress should consider creating a single export licensing system to strengthen export controls on China, the US-China Economic and Security Review Commission said in its annual report to Congress released last week. In its report, the commission urged Congress to consider a number of steps to make it more difficult for China to evade US controls. First, the report recommends that Congress hold hearings to evaluate the potential for establishing a single export licensing system.

Assistant Secretary of Commerce for Export Administration Thea Kendler held a briefing November 6 to discuss the rules issued October 17th. She explained the new parameters, associated license requirements, the new notified advanced computing license exception, and some of the measures put into place to address possible circumvention of the controls.

The Office of Inspector General (OIG) for the Department of State has released a redacted report detailing its review of end-use monitoring (EUM) for U.S. security assistance in Ukraine. This follows the U.S. commitment of approximately $30 billion in aid since Russia's invasion in February 2022. Findings indicate that Embassy Kyiv conducted limited in-person EUM activities, supplemented by secondary procedures involving Ukrainian government assistance. No misuse of equipment was identified, and commitments from recipients remained unchanged post-invasion. However, challenges like security restrictions and ad-hoc reporting of battlefield losses were noted.

U.S. Customs and Border Protection officers seized a shipment of China-bound deuterium cylinders in Norfolk on October 18 for violating nuclear nonproliferation licensing laws. On August 22, CBP’s National Targeting Center (NTC) identified the deuterium on the manifest of a shipping container destined to China. CBP officers detained the deuterium, and the following day requested a licensing determination from the Bureau of Industry and Security. 

Senate Finance Committee Chair Ron Wyden (D-Ore) praised the Commerce Department for putting in place new policies to prevent the promotion of US surveillance technology to foreign governments in response to his request earlier this year. “For the first time the Department is making clear that the United States will not help companies find foreign markets for products or services that undermine democracy or enable repressive surveillance and discrimination," said Sen. Ron Wyden (D-OR) applauding the change.

Congressional China hawks sent a letter to Commerce Secretary Gina Raimondo Thursday, calling for the Department  to regulate the open-source collaboration model employed in modern advanced semiconductor design.   Reps. Mike Gallagher (R-WI) and Raja Krishnamoorthi (D-IL), along with Sen. Marco Rubio and fourteen other lawmakers call for the Commerce Department to “build a robust ecosystem for open-source collaboration among the U.S. and our allies while ensuring the PRC is unable to benefit from that work.”

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