US Chip Controls Have Hurt Exporters, GAO Says
Companies have experienced a loss of business and other negative financial effects as a result of the Bureau of Industry and Security’s October 2022 and October 2023 rules restricting exports of advanced computing chips and chipmaking equipment (see 2310170055), the Government Accountability Office said in a new report released Dec. 2.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
Companies have had to hire new staff or increase their use of outside counsel to comply with the new rules, and some exports were put on hold while companies tried to understand the regulations, the GAO said. The restrictions also prompted some foreign customers to replace U.S.-made products with non-U.S. alternatives.
The private sector has reported a host of other challenges in complying with the rules, including that they are so complex that two engineers could interpret the same aspect of a rule in “two completely different ways,” the report says. A lack of clarity is another problem, such as whether an appliance would be considered a computer for export control purposes. Companies also contend that the rules control more technology than necessary to protect national security and should be more “surgical.”
BIS has taken several steps to address compliance challenges, including clarifying and tweaking the rules, engaging with industry, providing additional information online, revising licensing processes and soliciting feedback, the GAO said.
While some companies have welcomed the BIS efforts to ease compliance challenges, they believe additional measures could help, such as returning to proposed rulemakings instead of issuing interim final rules. Unlike a proposed rulemaking, which includes a public comment period before taking effect, an interim final rule can be enforced before firms have time to understand the rules or provide feedback, the report says. Companies also suggested answering questions about the interpretation of the rules in a timely manner, and increasing engagement with the private sector before publishing new rules.
The GAO released its report the same day BIS unveiled a new round of chip export restrictions (see 2412020016).