BIS Nominee Clears Senate Banking Committee, Pledges Many Agency Reviews

Committee ranking member Elizabeth Warren, D-Mass, announced before the vote that she would oppose Kessler partly because he provided “vague” answers to her written questions about how he would use export controls to keep advanced technology out of the hands of adversaries. Warren also criticized Kessler for declining to admit during his Feb. 27 nomination hearing that Russia was the aggressor when it invaded Ukraine (see 2502270041).

In written answers, Kessler said he would review whether the Bureau of Industry and Security needs more statutory authorities to do its job. He would also consider ways to enhance controls on semiconductor manufacturing equipment, examine the work BIS has done to address the risks of remote access to U.S. technology, and review the agency’s end-use controls, licensing policies and due diligence requirements. He reiterated plans to scrutinize whether BIS needs more overseas enforcement agents and whether the bureau's latest export controls on advanced artificial intelligence chips could be made more effective and less burdensome.

Asked whether China’s Huawei and Semiconductor Manufacturing International Corp. (SMIC) violated U.S. law by producing 7-nanometer chips with U.S. technology (see 2411050039), Kessler said he would “refrain from prejudging whether any particular company has violated export control laws. However, if confirmed, I commit that I will review this case and consider the appropriate response, including with respect to existing licenses.” He gave a similar answer when asked whether China’s ChangXin Memory Technology (CXMT) should be added to the Entity List and be subjected to the foreign direct product (FDP) rule.

He was also asked whether he would “end the ‘whack-a-mole’ approach that currently epitomizes use of the Entity List, including by automatically applying an Entity List designation to all subsidiaries and affiliates of the added party and requiring greater due diligence from U.S. firms.” Kessler said he would “review how BIS formulates the Entity List and consider ways to make it a more effective enforcement tool.” He also would “consider adding new entities to the Entity List, especially if they are related to other entities that are already on the Entity List.”

Asked about allegations that BIS does not adequately enforce its rules, Kessler said he would ensure that enforcement is “aggressive” and that BIS consider “imposing penalties to the full extent permitted” under the Export Control Reform Act of 2018 “in appropriate cases.” To prevent Russia from obtaining unauthorized exports through third countries, he would review how BIS has addressed the problem and “then assess whether changes in licensing policy or enforcement would be appropriate.”

To ensure allies and partners align with U.S. export controls, Kessler would pursue diplomacy as a “first step.” He would consider tariffs and other forms of pressure “commensurate with the gravity of the national security and foreign policy interests at stake.” While multilateral export controls are generally preferred, Kessler would impose unilateral controls when warranted, such as when controlled items are unavailable from a foreign source or when the U.S. can act as a “pacesetter” for other countries.

Kessler would consider using the FDP rule “in any situation where it would promote U.S. national security and foreign policy interests.” The FDP rule "is an important tool that extends the reach of export controls to foreign-made products," he said.