Having served as the prior Undersecretary to the Department of Commerce’s Bureau of Industry and Security, Cordell Hull has a unique and important perspective on its future. Prior to BIS, he served as the general counsel to the House Intelligence Committee when Congress made generational reforms to export control law. While at BIS, he spearheaded the implementation of those reforms – including the Export Control Reform Act (ECRA), which enshrined permanent statutory authority for BIS’s export-control regulations. Hull can be credited in part with the reinvention of BIS as a powerful agent for international affairs and its ability to secure policy for the national interest. This is one of advantages the President Biden inherited upon taking office.
Hull recently spoke with China Tech Threat’s Roslyn Layton and reflected on several topics pertaining to BIS. Here’s Part I, which focuses on license processing and emerging and foundational technologies. Parts II and III will be released next week. In general, Hull suggests that BIS should continue its current path of ECRA implementation. Congress empowered BIS with powerful tools, which it must use effectively, notably the Military End-User list, the foreign direct product rule, and Section 232. Moreover, he expects BIS’ enforcement to trend upward.[1]
License Processing
BIS should endeavor to process licenses within 30 days (as ECRA recommends), but it should continue to take its time on more complex licenses when necessary.
In 2020, BIS processed nearly 38,000 export licenses in an average of 23 days,[2] 10.8% higher than the previous year.[3] It’s important to ensure that BIS and its interagency colleagues are adequately resourced to continue to process licenses expeditiously. However, we must ensure BIS will have the resources – both monetarily, as well as support from the U.S. Government and allies – for license requests requiring additional investigation for national security reasons, beyond the standard review. While Hull says that this has not been a problem to date, the 2020 rules – including additional parties added to the Entity List, the Military End-User (MEU) Rule and MEU List, and the revision of the Foreign-Produced Direct Product Rule – BIS’s workload could increase in the number and complexity of license requests. BIS and Congress should continually assess BIS’s resources to ensure proper and prompt review.
Emerging and Foundational Technologies
BIS should fully execute ECRA’s mandate on emerging and foundational technologies. ECRA required BIS to lead an ongoing interagency group to identify – and potentially control – “emerging” and “foundational” technologies essential to the national security of the United States. In November 2018, BIS issued an advance notice of proposed rulemaking (ANPRM) with respect to 14 technologies.[4] BIS solicited comments on the appropriateness of controlling those technologies. As of January 2021, BIS has issued controls on more than 35 emerging technologies. BIS needs to continue to look at and control appropriate technologies, ideally within one of the multilateral regimes (Wassenaar Arrangement for dual-use goods; Australia Group for chemical or biological agents; Missile Technology Control Regime; or the Nuclear Suppliers Group).
Foundational technologies are harder. Many of those uncontrolled items were previously controlled items that have been used in ways that could threaten our national security or foreign policy objectives. In August 2020, BIS issued another ANPRM related to foundational technologies.[5] Unlike with emerging technologies, BIS did not list specific technologies but rather sought the public’s assistance in “[h]ow to further define foundational technology to assist in identification of such items.” BIS must thoroughly and expeditiously answer the question: What are foundational technologies, and should any such technologies be controlled?
[1] Michael Griffiths, US Export Control Agency Eyeing More Robust Enforcement, Global Investigations Review (Mar. 22, 2021), https://globalinvestigationsreview.com/just-sanctions/enforcement/us-export-control-agency-eying-more-robust-enforcement.
[2] U.S. Dep’t of Commerce, Bureau of Industry and Security, 2020 Annual Report, at 9, https://www.bis.doc.gov/index.php/documents/pdfs/2711-2020-bis-annual-report-final/file.
[3] Id.
[4] Review of Controls for Emerging Technologies, 83 Fed. Reg. 58201 (Nov. 19, 2018), https://www.federalregister.gov/documents/2018/11/19/2018-25221/review-of-controls-for-certain-emerging-technologies.
[5] Identification and Review of Controls for Certain Foundational Technologies, 85 Fed. Reg. 52934 (Aug. 27, 2020), https://www.federalregister.gov/documents/2020/08/27/2020-18910/identification-and-review-of-controls-for-certain-foundational-technologies