Regulatory intelligence for US exporters

BIS Fixing Chip Licensing Delays, Not Approving ‘Many’ Huawei Applications, Official Says

The Bureau of Industry and Security has been experiencing delays in semiconductor-related export license applications due to a higher number of disagreements with the other agencies that also review those licenses, a senior BIS official said this week.

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Eileen Albanese, director of the BIS Office of National Security and Technology Transfer Controls, said the agency’s recently issued complex chip export controls rules (see 2310170055) have taken time for other agencies to digest, and that has led to disagreements over export licenses for advanced chips and chip making tools.

Licensing disagreements between U.S. agencies are escalated to the Operating Committee, a group of officials from the Defense, Energy and State departments that work to resolve those disputes. But Albanese said the number of disputes since BIS updated its chip controls in October 2023 has overwhelmed the committee, which was “never designed to handle a large quantity of cases in dispute.”

BIS has needed to “ensure that all the agencies are working from the same set of requirements, and that has taken a little bit of time,” Albanese said during a virtual conference last week hosted by the Massachusetts Export Center. “So there has been a delay in that. We realize there's that delay.”

BIS “worked hard” to “resolve a lot of these issues,” and she said most have been addressed. “I believe you will see better time frames now,” Albanese said.

Albanese also said BIS isn’t granting many export license applications involving Huawei, even for low-level technology items. She said the Biden administration is “looking closely at Huawei applications,” and most are still “under interagency review.” Multiple reports over the last year have said the agency has stopped approving most exports to Huawei.

“I can tell you that probably there has not been many that have been approved recently because of the need for this policy review that is going on within the administration,” Albanese said.

She also touched briefly on how BIS is approaching potential export controls for cloud computing services. BIS officials last year said the agency was looking at ways to stop Chinese companies from using cloud providers to skirt its chip controls (see 2303210037), and Undersecretary Alan Estevez in December said he has a team thinking through potential control “options” (see 2312080048).

The agency will continue that work this year, Alabanese said. BIS asked for public comments on export restrictions on cloud services as part of its October 2023 rule, and Albanese said the agency may ask for another round of feedback when it publishes an upcoming rule, expected this month (see 2312120055), that will make corrections and clarifications to the requirements published in October.

“We are going to ask questions and ask for comments about cloud computing, cloud as a service,” she said. “So yes, cloud is definitely on the radar.”

Aside from semiconductors, Albanese also said the agency is looking into possible export controls for other emerging technologies, including biometrics and hypersonics.

"I know hypersonics is already controlled, but I think we're going to be looking at that," she said. "So it's really biometrics and probably hypersonics."