Lawmakers Again Ask Commerce to Increase Export Controls on China's SMIC
The Commerce Department should tighten export restrictions on China’s top chipmaker to prevent it from importing sensitive semiconductor equipment and exploiting a U.S. export control loophole, Sen. Marco Rubio, R-Fla., and Rep. Michael McCaul, R-Texas said. The lawmakers, who voiced similar concerns to Commerce last year (see 2103190005), said in a March 17 letter to Commerce that its export control licensing policies for Semiconductor Manufacturing International Corporation are “ineffective” and are denying less than 1% of export applications to sell technology to the company.
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“Because of the failure to fully tamp down on this [China]-controlled company, SMIC is selling its products at record rates around the world and bringing in money,” the lawmakers said, adding that SMIC may divert its technology to Russia amid crippling U.S. export restrictions and sanctions. They said Commerce should “rewrite SMIC’s Entity List rule to close dangerous loopholes that appear to allow nearly all sales to SMIC to continue without restriction” by imposing a policy of denial for all applications for items capable of producing at 16 nanometers. They also said all other items destined to SMIC and subject to the Export Administration Regulations should be subject to a license review policy of presumption of denial, and SMIC should be subject to restrictions under the foreign direct product rule.
“Adopting a stronger export control approach vis-à-vis SMIC would fortify American industry, weaken a malign [Chinese] competitor, and further cut off the flow of critical technology to Russia as it upends the rules-based international order and invades a neighboring democracy,” the letter said. “Given [China’s] tacit support for [Russian President] Vladimir Putin’s further invasion of Ukraine and Beijing’s clear alignment with Moscow, the department should act immediately.” A Commerce spokesperson didn’t comment.