US Should Explore Placing BIS, OFAC Under One Roof, Panel Says
The U.S. government’s “economic statecraft” tools, including export controls and sanctions, are “fragmented” across multiple agencies, and Congress should consider consolidating them into a single entity to increase coordination, focus and accountability, the congressionally mandated U.S.-China Economic and Security Review Commission said in its new 2025 annual report.
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The streamlined structure could help address the evasion of sanctions and export controls by China and Russia, says the report, released Nov. 18. “The United States urgently requires modernization of its export controls and sanctions regime to counter China’s systematic and persistent circumvention tactics,” the commission wrote. "The current fragmented approach across multiple agencies dilutes accountability and prioritization. Consolidating these authorities under a single entity would create clear ownership, institutional incentives to prioritize enforcement, and concentrated resources dedicated to countering circumvention."
The new agency would include the Bureau of Industry and Security, the Office of Foreign Assets Control, the State Department’s Office of Export Control Cooperation, the Defense Department’s Defense Technology Security Administration, and possibly others. It would report to a single Cabinet official or the president, and it would be “integrated” into the Intelligence community to improve its access to information on evasion networks.
At a rollout event for the report, Commissioner Michael Kuiken said the existing agencies are often “the equivalent of feudal states arguing over what they believe to be the most important or the most critical thing to do, and there’s not a natural way to bring these sorts of issues to a head inside of the interagency.” The commission’s recommendation would “take these factions and put them in one place,” creating a “forcing function to drive decisions," he said.
Commissioner Leland Miller said the restructuring would help “prioritize national security above other interests.” Currently, BIS is part of the Commerce Department, which is mainly tasked with promoting American business, while OFAC is part of the Treasury Department, which is primarily charged with ensuring financial stability, he noted.
Kuiken said that Commerce, unlike Treasury, is not part of the Intelligence community and that having BIS join a new agency that is part of that community would allow it to “drive collection requirements, which means you’re going to get answers to your questions.”
Recognizing that creating a new agency could take years, the commission proposes several changes to strengthen the ability of the existing BIS "to manage strategic competition with China in fast-moving technology sectors, such as leading-edge semiconductors used" in AI. It would direct the bureau to require export-controlled advanced computing chips to have tracking technology to counter diversion. Sen. Tom Cotton, R-Ark., and Rep. Bill Huizenga, R-Mich., introduced legislation in May calling for advanced chips to have location verification mechanisms (see 2507080001).
The commission also would shift export controls on advanced chips from a “sell” model to a “rent” model; set up a “systemic, integrated intelligence unit” at BIS that would include analysts from the intelligence community; move all items subject to a “presumption of denial” license application review standard for export to China to a “policy of denial”; and create a "whistleblower incentive program" to encourage private citizens to report export control violations.
To counter Hong Kong’s growing role in sanctions and export control evasion, the commission would set up an interagency task force to address the issue, and it would codify authorities to impose secondary sanctions on Chinese and Hong Kong financial institutions that facilitate evasion. It also would scrutinize Hong Kong’s status as an official offshore U.S. dollar clearing center, and increase due diligence for sales of Common High Priority List items to China or Hong Kong.
To improve the screening of foreign investment in the U.S., the commission would establish a rebuttable “presumption of denial” for investments that could allow China or other “foreign adversaries” to obtain self-sufficiency in critical technologies or otherwise harm U.S. economic or national security. It would also review China’s greenfield investments in the U.S. to assess whether they could harm U.S. national or economic security.
Commission Chair Reva Price said the panel plans to brief lawmakers on the report “over the coming weeks and months.” The document, which is more than 700 pages long, addresses a wide range of issues, including China's energy and space ambitions, role in Southeast Asia scam centers and relations with the Philippines and Taiwan.
The report’s release came a day after the commission said that U.S. and multilateral sanctions and export controls imposed on Russia, Iran and North Korea have had only a limited effect due to China’s role in helping those countries evade the restrictions (see 2511170021).