Recently Released Export Control Signals BIS Intent to Narrowly Control Emerging Tech, Law Firms Say

The Commerce Department’s narrow set of controls on exports of geospatial imagery software issued earlier this month (see 2001030024) could foreshadow a more “targeted and restrained approach” in the agency’s emerging technology effort, according to a Jan. 8 post from Paul Hastings. By limiting the controls to software that is only “specially designed” for specific purposes, such as “training a neural network to analyze geospatial imagery,” Commerce is signaling its intention to impose controls that only capture small slivers of technology, the post said. “The move might signal an inclination by [the Bureau of Industry and Security] to take a careful approach to regulating [artificial intelligence] and other emerging technologies.”

And while the control will be issued under a temporary holding classification that lasts for one year, the law firm said Commerce likely intends to permanently control this technology. “The U.S. Government may be anticipating submitting this software -- and perhaps other types of emerging technologies -- to Wassenaar to secure a higher level of classification for these items on a permanent basis,” the post said.

With this most recent export control, it appears industry concerns of broad, sweeping controls of emerging technology may have been “unfounded,” according to a Jan. 8 post from Ropes & Gray. Although Commerce’s delay in releasing the controls spiked industry fears, former and current Commerce officials have said they expect the controls to be narrow (see 1911070014). “The Rule thus suggests that BIS is seeking to tailor the new export controls to restrict access to technology that the U.S. government believes has national security implications, without needlessly stifling technological development and economic activity,” the post said.

Commerce will likely release “similar, interim final rules” in the “coming months,” the post said. “The rolling implementation of ECRA will therefore require companies ... to continue to closely monitor ever-evolving export and foreign investment restrictions.”

Aside from imposing export controls, the interim final rule also expands the jurisdiction of the Committee on Foreign Investment in the U.S. to review investments that deal in geospatial imagery software, the law firm said. Companies that deal in the geospatial software covered in the rule should be mindful that proposed investments by non-U.S. parties “may now trigger CFIUS filing obligations,” the post said.