Think Tank Assesses Effectiveness of New Wassenaar-Minus-1 Controls
A new Bureau of Industry and Security license exception that could allow U.S. exporters to continue shipping certain advanced technologies to a list of close American allies is promising, but it presents some “limitations” if not implemented correctly, the Center for Strategic and International studies said this week.
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BIS announced the new exception in September as part of a broader rule to place new controls on quantum computing, semiconductor manufacturing, 3D printing and other critical technologies that BIS said foreign militaries could use to harm U.S. national security (see 2409050028). The rule is part of a so-called Wassenaar-minus-one effort by the U.S. and its allies to coordinate on export controls outside the multilateral Wassenaar Arrangement, which has struggled to advance certain export control proposals because Russia remains a member with veto power (see 2405300063).
The rule’s license exception will allow exporters to ship certain advanced tech items to certain countries -- without a license -- if BIS determines those countries have “equivalent national controls” on the same items.
The CSIS commentary, written by CSIS senior adviser Bill Reinsch and research intern Altynay Junusova, said the exception’s “effectiveness depends on how accurately the United States and its partners assess the landscape of companies engaged in critical technologies.” The think tank said experts have warned that without an “up-to-date map, there is a risk of excluding key players or letting sensitive technologies advance outside control frameworks.”
If the new exception proves successful, it could set a “precedent” for exceptions in future BIS rulemakings, CSIS said, “as seen with the expanded use of the foreign direct product rule on Huawei.” But if allies don’t make progress in adopting similar controls, the U.S. “may revert to unilateral ‘long-arm’ measures,” CSIS said.
The think tank noted that other CSIS experts have suggested the U.S. and its trading partners create a series of “mini-regimes” to replace Wassenaar -- similar to the Group of 7 -- which would include key technology producing countries such as South Korea, Australia and the Netherlands.
“In any effort, a new regime must focus on cooperation, information sharing, and centralized export controls,” CSIS said. “This would restore the political weight that Wassenaar had when it was initially proposed with strong backing from the U.S. Department of State.” It added that this may require the incoming Trump administration “to acknowledge the limitations of the ‘America First’ policy when addressing strategic export controls.”