#FutureofBIS

4 Export Control Fallacies and Their Rebuttals

Posted on by China Tech Threat
By Steve Coonen Writing in the Wall Street Journal last week, professors Henry Farrell and Abraham Newman criticize American export control policies as having the potential to create more problems then they solve. Pointing the finger at America as a force for destabilization is divorced from the reality of the global export control landscape. China’s commitment to using American technologies to build up its military has necessitated export controls targeting the country’s chip sector. Here are four fallacies promoted in the article (in italics) and my rebuttals: Fallacy #1: The U.S. is to blame for export control-related global disruptions “A new tit-for-tat is emerging, and as China responds to the turn in American policy, there is a risk that the… Read More

Actions Speak Louder than Words—So Where’s the Action from the Commerce Department?

Posted on by China Tech Threat
“Actions speak louder than words” was the refrain from Commerce Secretary Gina Raimondo on CBS’ Face the Nation last Sunday. Raimondo is referring to what she hopes to see from the Chinese government following her meetings in Beijing last week—not just promises of change, but concrete steps. The world shouldn’t hold its breath waiting for them. The Chinese Communist Party (CCP) can’t be trusted to uphold its promises—just ask the citizens of Hong Kong, who have seen their autonomy revoked in the last several years. Or maybe President Obama, to whom Xi Jinping made promises in 2015 that the CCP would stop militarizing the South China Sea. Or other nations in Asia, which are recently outraged after China released a… Read More

Actions Speak Louder Than Words – Willful Blindness Series Recap

Posted on by China Tech Threat
With Labor Day around the corner, the unofficial end of summer is almost here. So, here’s our final plug for beach reading from CTT special advisor Steve Coonen. Coonen, who spent more than two decades in uniform as an Army artillery and foreign affairs officer and then nearly 14 years as an analyst at the Defense Technology and Security Administration (DTSA), wrote a nine-part summer series for CTT on America’s broken export control system.  The need to expose the administration’s willful blindless as it relates to export controls could not be more timely. Multiple outlets are reporting that one outcome of Commerce Secretary Gina Raimondo’s visit to China is an agreement between the U.S. and China to begin a series… Read More

How BIS Has Accommodated Corporations at The Expense of National Security

Posted on by China Tech Threat
By Steve Coonen Recently I was asked, “On a scale of A to F, how would you grade BIS’s performance over the past 5 years?” My response: “If one removes ‘security’ (the S from BIS), then BIS fully merits an A+.” That’s not a compliment. For years BIS has accommodated corporations and industry groups at the expense of American national security. For starters, the Commerce Department’s core mission of advancing U.S. economic interests has prevented an appropriately rigorous approach to export controls. The Department of Commerce’s self-described mission is to “to create the conditions for economic growth and opportunity for all communities.” Consequently, BIS’s goal of denying the export of U.S. technology which can be used for military purposes is… Read More

Fixing the Failings of the Interagency Export Control Review System

Posted on by China Tech Threat
By Steve Coonen As I established in my paper Willful Blindness released in May, the Commerce Department’s Bureau of Industry and Security (the unit within the U.S. government primarily responsible for stopping the Chinese military from obtaining American technologies) has become a rubber stamp for the export of controlled technologies to China. Case in point: In 2022, the U.S. Commerce Department’s Bureau of Industry and Security (BIS) approved over 91% of applications for the export of controlled technologies to China, even greater than 2021’s 88% rate.  Yes, BIS needs to do a better job of denying tech exports to China. But BIS is not entirely at fault—it is just one cog in the broken federal machine tasked with defending U.S.… Read More

The U.S. Cannot Continue to Export Dual-Use Technologies to China

Posted on by China Tech Threat
By Steve Coonen As anyone who has seen the new film Oppenheimer can attest to, the U.S. government has historically gone to great lengths to prevent military tools from falling into the hands of our adversaries. So why is the federal government continuing to rubber stamp the export of dual-use technologies to our greatest adversary? Dual-use technologies are those which can be used for both military and civil purposes. Some items common to both civilian and military hardware, such as nuts, bolts, screws, seals, etc., pose no national security concerns. But others do. For example, the seemingly innocuous carbon fiber filament used to make high-performance brake pads is also the same material used to manufacture nose cones for ballistic missiles.… Read More

Why BIS End-Use Checks in China Are Useless

Posted on by China Tech Threat
By Steve Coonen Quoting an old Russian proverb, President Ronald Reagan once remarked, “Trust, but verify.” Reagan’s words may have been appropriate as the U.S. negotiated an arms control agreement with the USSR. But when it comes to inspecting how China is using American technologies, the U.S. government should adapt his words to go a step further: “Distrust and verify.” At their root, the Bureau of Industry and Security’s (BIS) end-use checks in China are practically useless. Under the terms of the U.S.-China end-use check agreement, it is impossible for U.S. export control officers (ECOs) to verify the ultimate destinations or end-uses of U.S. technology. With other countries, U.S. export control officers can conduct post-shipment verifications (PSV) with few restrictions… Read More

Reforming the Flawed Process of Listing Chinese Entities on A Case-By-Case Basis

Posted on by China Tech Threat
By Steve Coonen In 2019, the Department of Commerce’s Bureau of Industry and Security (BIS) wisely placed Huawei on the Entity List. This action was necessary for making sure the company could not obtain American components it needs to win the 5G race. But Huawei moved fast to protect its interests, quickly spinning off a company called Honor to maintain the flow of U.S. components required to produce 5G mobile devices. A state-owned company, Shenzhen Zhixin New Information Technology, subsequently purchased Honor in 2020, demonstrating the important role that the Chinese government plays in directing strategic technologies such as 5G. During my time serving at the Department of Defense (DOD), I personally pushed for the federal government to add Honor… Read More

5 Questions for Tomorrow’s Hearing on The Biden Administration’s PRC Strategy

Posted on by China Tech Threat
Tomorrow, the House Select Committee on the Chinese Communist Party (CCP) will hold a hearing on “The Biden Administration’s PRC Strategy.” With Thea Rozman Kendler, Assistant Secretary of Commerce for Export Administration, set to appear before the Committee, it is virtually certain that lawmakers will probe the activities of the Bureau of Industry and Security (BIS). Here are some questions we’d ask Kendler with a focus on legacy chips, a critical technology segment that China is moving fast to dominate: China is ramping up its ability to produce legacy-node chips. Technology analyst Dan Wang wrote in the New York Times this weekend, “…a world in which Chinese companies dominate the production of mature chips — driven directly by American policy… Read More

Why BIS Should Put Components for Legacy Semiconductors Under Export Controls

Posted on by China Tech Threat
By Steve Coonen Last week, Chairman Mike Gallagher of the House Select Committee on the Chinese Communist Party spoke a plain truth: “Every foreign business that enters China takes on a sometimes silent, sometimes not-so-silent business partner: the Chinese Communist Party.” This reality continues to play out in the legacy semiconductor space. The more that American companies are allowed to sell components and manufacturing equipment for legacy chips to China, the more power the CCP will acquire to shape American national and economic security. When it comes to focusing on the danger of advanced or legacy Chinese chips, the U.S. government should reject a false choice of “either/or.” It must embrace a “both/and” concept and act to prevent a looming… Read More