Regulatory intelligence for US exporters

No Plans to Mandate Location, Tech Monitoring of Chip Exports, BIS Officials Say

The Bureau of Industry and Security has no immediate plans to try to require companies to monitor their sensitive chip-related exports through location tracking or other hardware, BIS officials said this week, suggesting that the technology needs to be studied more.

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“There's no technological silver bullet out there,” BIS Undersecretary Alan Estevez said during a March 27 news conference. “You'd have to show that it's workable before we even ever come out and try to mandate something like that.”

Researchers have said governments could eventually require chip companies to use GPS-like location tracking for their chip equipment exports, which they say could help industry better conduct due diligence and improve government export enforcement (see 2403080030). Others have called for export controlled semiconductors to be installed with “on-chip governance mechanisms” -- physical devices built directly into the semiconductor that would allow the chip to be used only in situations that comply with export controls or the terms of an export license (see 2401080060).

Estevez and other BIS officials, in response to a question from Export Compliance Daily, said they are aware of those suggestions, but the U.S. isn’t currently planning any mandates.

Matthew Axelrod, the agency’s top export enforcement official, called them “interesting” ideas. “We always are sort of taking in interesting ideas and thinking about them,” he said.

Thea Kendler, the BIS assistant secretary for export administration, said the agency is “extremely grateful” for the due diligence work that companies already do. “We certainly have a very strong ask of industry to do the due diligence on where their chips are going, especially these advanced chips, or if it's possible that their chips might end up in Russia or Iran or Belarus,” she said.

“But we're not mandating that specific tracking.”

Estevez, who previously served as the Defense Department's principal deputy undersecretary for acquisition, technology and logistics, said he “spent a lot of time” at the Pentagon trying to track similarly sensitive items in shipping containers, “and it's not as easy as we think.”

“All things like that are kind of interesting” but “good ideas are just good ideas,” he said. “Sometimes they come to fruition, and every now and then" grapes become "wine instead of just juice.”