Regulatory intelligence for US exporters

Export Controls Haven't Been 'Particularly Effective,' Former DHS Official Says

Export controls on their own haven’t historically proven to be very effective in stopping U.S. adversaries from acquiring illegal technologies and components, said Daniel Gerstein, a former export control official at the Department of Homeland Security. Gerstein, speaking during a June 16 Emerging Technology Technical Advisory Committee meeting, said the U.S. and other countries have “ample information telling us that they have not been particularly effective, even for sanctions regimes.”

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He specifically pointed to a case in which North Korea performed a missile test into the water in around 2014. After they were retrieved, the UN found parts in the missiles from 21 different countries, Gerstein said, and many of them were members of the multilateral Missile Technology Control Regime.

“What it tells you is that despite our best efforts, our ability to control the movement of the physical goods is not itself very good,” said Gerstein, a senior policy researcher at the Rand Corporation. “And so it calls for thinking about how we might try to improve that.”

Gerstein also said export controls are going to be “wildly affected” by 3D printing, additive manufacturing and other similar emerging technologies. Export controls have “largely been trying to manage the physical movement of goods and even ideas,” he said, but now face “something very different.”

“We're talking about going from a computer-aided design into a physical component,” Gerstein said of export controls over 3D printing. “And so I'm questioning whether or not we’ll have the same capability.” Exporters in the EU are struggling to understand how export restrictions apply to intangible technology transfers, such as cloud services or data transfers (see 2206150038).

The U.S. should also be careful when crafting export controls on emerging technologies to avoid hurting U.S. companies, Gerstein said. He pointed to the U.S. satellite industry, which was slapped with export restrictions at a time when the rest of the world was looking to develop satellite technologies or access satellite capabilities.

“What it actually did was it caused a good bit of the satellite industry to go elsewhere, to be developed by other countries,” Gerstein said. “We went from having a 70% share of the market down to some 30% share of the market.” He said it’s important for governments to understand “when technologies are no longer controllable.”