Why BIS End-Use Checks in China Are Useless

By Steve CoonenQuoting 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

Will Japan Go Beyond U.S. in Semiconductor Export Controls?

.wp-block-kadence-advancedheading.kt-adv-heading_630bf4-2c, .wp-block-kadence-advancedheading.kt-adv-heading_630bf4-2c[data-kb-block="kb-adv-heading_630bf4-2c"]{font-style:normal;}.wp-block-kadence-advancedheading.kt-adv-heading_630bf4-2c mark, .wp-block-kadence-advancedheading.kt-adv-heading_630bf4-2c[data-kb-block="kb-adv-heading_630bf4-2c"] mark{font-style:normal;color:#f76a0c;padding-top:0px;padding-right:0px;padding-bottom:0px;padding-left:0px;} Last October, the U.S. showed leadership on the global stage when the Bureau of Industry and Security (BIS) issued long-awaited export controls aimed to restrict the PRC’s semiconductor capabilities. Multilateral momentum followed with Japan and the Netherlands agreeing to limit exports of chip making equipment to China. More recently, The Financial Times reports that Japan is poised to levy export controls next month that go beyond U.S. action. This is notable because the U.S. focused on advanced chips while Japan is going broader and covering legacy chips as it would cover larger (45 nm) chips. .wp-block-kadence-advancedheading.kt-adv-heading_8e2244-84, .wp-block-kadence-advancedheading.kt-adv-heading_8e2244-84[data-kb-block="kb-adv-heading_8e2244-84"]{font-style:normal;}.wp-block-kadence-advancedheading.kt-adv-heading_8e2244-84 mark, .wp-block-kadence-advancedheading.kt-adv-heading_8e2244-84[data-kb-block="kb-adv-heading_8e2244-84"] mark{font-style:normal;color:#f76a0c;padding-top:0px;padding-right:0px;padding-bottom:0px;padding-left:0px;} According to FT, a Chinese chip factory executive said,“Japan’s export controls will be more disturbing… Read More

China Tech Threat’s Exclusive Interview with Congresswoman Radewagen

During a House Foreign Affairs Committee hearing on February 28, Rep. Aumua Amata Coleman Radewagen asked BIS Under Secretary Alan Estevez, “How many PRC chips are you comfortable having in DoD systems and critical infrastructure?”  We interviewed the Congresswoman afterwards to understand her perspective and what she hopes to achieve.Q1: What would you have liked to hear from BIS Under Secretary Estevez when you asked him “How many PRC chips are you comfortable having in DoD systems and critical infrastructure?”  “Ideally, zero. If that’s not the case, which it seems it’s not at all, it should be an active plan to move toward, not eventually but soon. We should develop clear goals and aggressive progress markers, including priorities… Read More

Is Commerce Getting Played By The Chinese Government On Export Controls?

China Tech Threat Co-Founder Dr. Roslyn Layton issued the below statement following the U.S. Commerce Department’s announcement today that YMTC, a state-backed chip maker with close ties to the People’s Liberation Army (PLA), has been added to the Entity List, along with several other Chinese companies. “The Commerce Department passed the 60-day window it set for itself to determine if PRC national champion chipmaker YMTC should be moved from the Unverified List to the Entity List. Its October 7 Export Control announcement seemed to signal a new era of enforcement at Commerce’s Bureau of Industry and Security (BIS), but praising ‘better behavior’ and ‘changes in attitude’ from China is not a strategy that will protect America’s national and economic security, especially given the Chinese… Read More

BIS is on the Clock: Experts Assess Export Controls, Effectiveness with Regard to China

We have 7 DAYS left in the BIS Countdown that started on October 7 when the Bureau issued long-awaited export controls targeting Chinese chipmakers. Will YMTC, a national champion chipmaker, and others on the Unverified List (UVL) allow for and pass end-use checks, or will they get put on the Entity List? That’s one of our big questions.Earlier this month, Roslyn Layton hosted a virtual event to dive into the new export controls and related issues with Nazak Nikakhtar (Partner and National Security Co-Chair, Wiley; former Department of Commerce Lead on CFIUS) and Dustin Carmack (Research Fellow, Heritage Foundation). They discussed the impact of the controls on China’s semiconductor capabilities, the Apple-YMTC relationship, and how the new Congress should… Read More

CTT Quick Cut Wrap Up: Experts Assess Implications of Export Controls for YMTC, Apple

The U.S. is at a key moment with its China-focused export control policy. On October 7, the Commerce Department issued a slew of new regulations targeting China’s semiconductor industry, triggering a crucial 60-day period when Commerce Department will decide whether to add firms like YMTC and CXMT to the Entity List.Meanwhile, a new Congress looks poised to exert pressure on Commerce to maintain a tough stance, with the potential new chairman of the House Foreign Affairs Committee, Michael McCaul, saying he will be “focused like a laser on export control issues.” And the New York Times wants to know if Apple will permanently step back from a dangerous Apple-YMTC deal, but Apple hasn’t yet commented.On November 15, CTT’s… Read More

New CTT Memo on Export Controls: “Five Areas to Watch During This Critical 60 Day Window”

On October 27, China Tech Threat released a new memo calling attention to five priority areas worthy of attention in the wake of the Department of Commerce’s new China-focused export controls issued on October 7.The new set of rules have been described as “wreaking havoc on China’s chip industry” and “strangling with intent to kill.” But it’s hard to gauge their full impact after only three weeks. Alan Estevez, the Under Secretary of the Bureau of Industry and Security, has said “we are not done” on focusing on the Chinese semiconductor sector.We’re now 20 days into an important 60 day window that will mark a critical time for analysts, reporters, and industry observers to assess how serious the… Read More

A Huge Week for American Policies on Chinese Technology, But More Must Be Done

The Bureau of Industry and Security (BIS) made waves last Friday when it announced new (and long-awaited) export controls to restrict the People’s Republic of China’s (PRC’s) ability to both purchase and manufacture certain high-end chips used in military applications. It also put YMTC on the Unverified List and made clear that this action could be a prelude to the Entity List.Multiple commentators have highlighted the significance of these moves. Greg Allen of the Center for Strategic and International Studies (CSIS) described the moves as “an unprecedented degree of U.S. government intervention to not only preserve chokepoint control but also begin a new U.S. policy of actively strangling large segments of the Chinese technology industry—strangling with an intent to… Read More

BIS Explains New China-Focused Export Controls, Entity List Regulations

Last Friday, the Bureau of Industry and Security (BIS) introduced new export controls to restrict the People’s Republic of China’s (PRC) ability to purchase or manufacture certain high-end chips, a move which China Tech Threat applauds. This timely action also includes the addition of 31 China-based companies and institutions, including Yangtze Memory Technologies Corporation (YMTC), which is China’s top memory chip maker and linked to the Chinese military, to the Unverified List.The rules are having an immediate impact. The Wall Street Journal reported yesterday – just under a week later – that American semiconductor manufacturing equipment companies such as KLA Corp and Lam Research are hitting pause on their operations in China and pulling out their staff based at… Read More

BIS Leader Previews New Civil Penalties for Export Control Violations

The Commerce Department’s Bureau of Industry and Security’s (BIS) Assistant Secretary for Export Enforcement, Matthew Axelrod, sounded all the right notes at a speech to the Society for International Affairs on May 16th. Recognizing that adversaries like Russia and China advance their own interests at the expense of the United States, Axelrod previewed strengthened civil penalties from BIS designed to deter American firms from violating export control laws. The proposed new penalties include:BIS publicly disclosing which companies it investigates for export control violations when a case opens, not when it is resolved, often years laterForcing companies to admit wrongdoing if they are found to have violated export control lawsIncreasing financial penalties for violationsThese ideas are welcome… Read More