The Bureau of Industry and Security has had “more than enough time” to issue a final version of its October China chip export controls, which need to be “strengthened” and “vigorously enforced” to maintain American semiconductor leadership, Sen. Marco Rubio, R-Fla., said in a May 30 letter to Commerce Secretary Gina Raimondo. Rubio asked the agency when it plans to issue the final rule, what changes will be made, whether BIS had “delayed” finalizing the rule and more.
The Commerce Department should amend several portions of its proposed guardrails on recipients of Chips Act funding, including measures that could prevent the U.S. chip industry from participating in international standards bodies or inhibit “routine” business activities, trade groups and technology companies said in comments released this week. Some said Commerce should also limit which companies qualify as “foreign entities of concern” and revise the rule’s proposed definition for “legacy semiconductor” to more closely align with export controls.
Ross Roggio of Stroudsburg, Pennsylvania, was convicted for a host of crimes including illegally shipping export-controlled firearms parts to Iraq and operating an illegal weapons manufacturing plant in Kurdistan, DOJ announced. Roggio was also convicted of torture and for arranging for Kurdish soldiers to abduct an Estonian citizen and detain him at a Kurdish military compound, where Roggio tortured the man. The victim worked at a weapons factory Roggio was developing in Iraq to manufacture M4 rifles and Glock pistols.
The U.S. announced a host of new Russia-related sanctions and export controls last week, including more than 300 sanctions designations by the Treasury and State departments and an expansion of Commerce Department export controls on items destined to Russia and entities supporting the country’s military. The measures, some of which were coordinated with allies as part of the Group of 7 summit in Japan, aim to “further undermine Russia’s capacity to wage its illegal aggression” in Ukraine, the G-7 countries said in a May 19 joint statement.
A series of export control indictments announced this week, including several for illegal shipments to China and Russia, only scratched the surface of prosecutions expected to be brought as part of the new Disruptive Technology Strike Force, said Matthew Axelrod, the Bureau of Industry and Security's top export enforcement official. “It’s just the beginning,” Axelrod said during a May 17 law conference hosted by the American Bar Association, Mayer Brown and American University. “I think you can expect to continue to see actions come out from the strike force as this work continues.”
DOJ this week unsealed indictments of six people for trying to illegally ship sensitive items from the U.S., including shipments of dual-use technologies and aircraft parts to Russia, isostatic graphite to Iran and trade secrets to China. The charges are the first enforcement actions brought by the Disruptive Technology Strike Force, a group launched by DOJ and the Commerce Department in February to investigate and prosecute criminal export violations (see 2302160019).
The House Foreign Affairs Committee could soon consider legislation that would harmonize various U.S. sanctions lists in a bid to help agencies better reach consensus when reviewing export license applications. Rep. Michael Waltz, R-Fla., said the Commerce Department has an outsized vote in adjudicating applications of sensitive exports and should be required to more carefully weigh input from other agencies, including the Defense and State departments.
The Bureau of Industry and Security needs much more funding to carry out its export control work, lawmakers and former officials said during a House hearing this week. Kevin Wolf, a former senior official at BIS, said Congress should consider doubling -- perhaps quadrupling -- the agency’s resources.
A former Pentagon official expected to testify before Congress May 11 said U.S. officials for years have “refused” to fix failures in its export control system that allow China to acquire sensitive technologies. Stephen Coonen, who spent nearly 14 years in the Defense Technology Security Administration, including as its senior foreign affairs adviser for China, said he resigned from the agency in 2021 to protest the Bureau of Industry and Security’s “willful blindness” surrounding its export policies.
Although Taiwan Semiconductor Manufacturing Company last year secured a one-year authorization to continue certain China-related activities despite the Commerce Department’s October chip controls, the company has “no assurance that we will be able to continue securing such general authorization on a timely basis or at all,” it said in an April Securities and Exchange Commission filing. The Bureau of Industry and Security recently said it’s working with some companies to allow them to continue certain activities authorized by the waivers after they expire (see 2302240008).