Legislators: BIS Is Failing to Implement Export Controls; The Chinese Government Benefits

Earlier this month, Texas Representative Michael McCaul, Chairman of the China Task Force, hosted a roundtable on export controls. Featuring task force members Representatives Mark Green (TN-07), Scott Perry (PA-10) and Andy Barr (KY-6), the discussion centered on the actions that must be taken to prevent the Chinese Communist Party (CCP) from obtaining critical U.S. technology. 

Rep. McCaul opened the discussion with a warning that the CCP is a long-term generational threat and posed the question: “​​How are we going to compete against China if we don’t address this very important issue of us exporting our technology that they then use to build their military apparatus?”

A consistent theme throughout the discussion was how ineffective export controls currently are and each member brought the discussion back to the fact that less than one percent of export control license applications brought before the Bureau of Industry and Security (BIS) are denied, even when they are submitted with a presumption of denial. “At somewhere between 98-99.5 percent of everything going through without a license, we can effectively say there are no export controls regarding the Communist Party of China,” Rep. Perry bluntly assessed.   

Task force staff member Dan Markus listed a series of export statistics that further underscored the problem concluding that the US does not have visibility in to 99.5% of exports sent to China, and that BIS has only nine export officers around the world, with only two in China. Even then, BIS can’t do end use checks because the Chinese Government doesn’t abide by our laws to allow them. 

Kentucky Rep. Andy Barr stated a weakness of our export control system is that, despite passing the Foreign Investment Risk Review Modernization Act to close CFIUS loopholes and the Export Control Reform Act, the Department of Commerce is not implementing the requirements fast enough . . . and is prioritizing profits of private corporations over US national security. “The least we can do is to deal with export controls, which is our voluntary transfer of technology. If we can’t even get the voluntary transfer of technology controlled through export controls, how on earth are we going to prevent them from stealing our intellectual property through illicit means?,” he wondered. 

Rep. McCaul warned of similar concerns with conflicting priorities: “The Bureau of Industry & Security puts too much emphasis on industry and very little if nothing on security and that has to change.” However, with a new BIS leader, Alan Estevez, bringing unparalleled national security experience to the position, the agency’s focus could tip back in favor of security. In the past year, China Tech Threat has published a series of policy recommendations to strengthen the agency’s agenda, streamline and improve export control policy, and better ensure U.S. national security interests.

For more on the panel, including an explanation of the Entity Lists and the evaluation process, watch the full panel here.