Commerce Official Calls for Better Gov't-Wide Economic Security Framework

Graves, speaking during a Dec. 16 event hosted by the Center for a New American Security, said a more comprehensive framework to coordinate on those policy tools is “absolutely necessary.”

When Graves was first brought on to head Commerce under Secretary Gina Raimondo, he said the agency’s various bureaus “didn't really talk all the time, or very often, about these types of issues.” But he said that has since changed, pointing to a new report published by Commerce this week that illustrates some of the work the agency has done over the last few years to deploy its national security tools in a “synchronized fashion.”

Graves added that conversations around the Committee on Foreign Investment in the U.S. are “more integrated than” in previous years among various Cabinet agencies, and that Commerce is working “much more closely” with both the State and Defense departments. But he said more can be done.

“I know a number of my colleagues at other agencies are thinking about this, thinking about the strategy that they want to leave behind and the framework for moving forward,” he said. “I think there's a recognition across the interagency that economic security is something that they have to think about, and that they need a framework for how they do the work going forward.”

Graves was also asked how he thinks the U.S. can better work with allies and companies to improve its enforcement of export controls, including against China. “It's something that we've been thinking about, certainly, for the last three years,” he said.

Part of the challenge has been convincing allies to create new laws to enforce export restrictions on sensitive dual-use items, he said. Graves said he has asked himself: “How do we get our partners to better understand how to use those tools? How do they see the landscape, the environment and what companies are doing,” and how is that different from the U.S. point of view?

“We learned very quickly that the landscape for export control enforcement around the world is very lumpy,” Grave said. “They've had to rely on other rules and laws to be able to get at the same effect that we've had.”

He said the Bureau of Industry and Security's controls have been “very effective,” especially the foreign direct product rule -- a rule that places license requirements over certain foreign-produced items made with certain U.S. technology or software -- which he called “the nuclear option.” But he acknowledged that some U.S. trading partners don't have that same ability.

“It's a little bit of just the squeaky wheel and banging a little bit harder to try and push them,” he said of convincing allies to impose controls. “But it requires a lot of coordination and collaboration.”

He also said BIS needs more funding to improve its own export control enforcement. The agency “has done an amazing job on the enforcement side,” but it needs more employees, Graves said, echoing calls for more money from other senior Commerce officials (see 2312040041 and 2312070074).

Graves said the Office of Export Enforcement is the size of a “small district office” of other U.S. law enforcement agencies, except it's called on to “enforce our export controls across the entire globe.”

“So when you're thinking about a country like [China], and you realize that you only have a handful of individuals at BIS who are in place to enforce the rules across the most populous country in the world, it makes it very difficult for them to do as good a job as they might,” he said, adding that “Congress needs to know that BIS needs more funding to be able to do their mission.”