Regulatory intelligence for US exporters

BIS Planning New Emerging Tech Proposals, Still Reviewing Surveillance Controls

The Bureau of Industry and Security is working on several new proposed rules for emerging technologies and is still sifting through industry comments on potential controls for surveillance technologies, the agency said in its 2020 report to Congress this month. Along with its work on emerging technologies last year, the agency said it nearly doubled its civil penalties from 2019, processed about 3,000 more export license applications, and met with a range of trading partners and multilateral export regimes to discuss improvements to export controls.

The Trump administration left office after overseeing export controls for 37 emerging technologies, but BIS said it had hoped to propose at least three more controls before the end of 2020. Those controls, which are still being considered, cover technologies related to quantum computing, advanced manufacturing and pressure gain combustion engines. BIS experienced delays and a slowdown at the Federal Register toward the end of the year, which has impacted several rules (see 2012080046).

BIS did not provide a timeline for publishing those controls and said it is still conducting an in-depth review of China-related export controls for surveillance technologies, which began last summer (see 2007220050). It also said it is still reading through industry feedback on imposing new license requirements on surveillance-related items used for crowd control, including facial recognition systems, machine learning, and biometric and artificial intelligence technologies (see 2007160021). But the agency did say it has “received very few license applications” for exports of those items -- including riot shields, tear gas and other items that may lead to human rights violations -- to Chinese security agencies. The agency has denied “all applications received” for those exports.

The agency used the report to tout its export control engagement with allies despite travel restrictions caused by the COVID-19 pandemic, which hampered coordination within multilateral regimes, including the Wassenaar Arrangement. Even though Wassenaar’s 2020 plenary was canceled (see 2011090045 and 2011250054), BIS said members “continued to cooperate to ensure the detection and denial of undesirable exports” and made progress on a “comprehensive and systematic review” on the regime’s controls lists to “ensure their continued relevance.” The regime has been criticized for failing to meet modern export control challenges (see 2012140049 and 2009290042).

BIS said it had bilateral export control discussions with Australia, Belgium, Canada, China, Finland, Germany, the European Union, Hong Kong, India, Israel, Italy, Japan, Latvia, Luxembourg, Malaysia, Poland, South Korea, Singapore, Thailand, Taiwan, Ukraine, the United Arab Emirates and the United Kingdom. The agency said it spoke about its export control policies, licensing procedures and enforcement issues, and hosted “outreach engagements’ with several trade allies, including Australia, Japan, the Netherlands and the U.K.

The report also outlined the agency’s 2020 export and enforcement statistics, saying BIS almost doubled its civil enforcement penalties, issuing just over $32 million in penalties last year, compared with nearly $18 million in 2019. BIS also processed about 37,800 export license applications last year -- a 10% increase from the roughly 34,200 licenses processed in 2019 -- and said its investigations led to 36 criminal convictions, the same number as in 2019.

The agency continued to dedicate resources to deemed export compliance checks, conducting more than 658 enforcement visits in 2020 to companies that had “not previously submitted applications” for deemed export licenses. BIS said it began 77 cases involving allegations of deemed export licensing violations last year.