Kessler: BIS Aims to Hire Hundreds of New Staff, Press Allies to Align Their Controls

BIS would hire almost 200 export enforcement special agents, who would be stationed across the U.S. to charge those who illegally share U.S. technology with adversaries, Kessler told the House Foreign Affairs Subcommittee on South and Central Asia. BIS also would more than double the number of export control officers stationed overseas, from 12 to 30, to monitor foreign compliance with U.S. export controls.

The agency's total request of $303 million, up from $171 million in FY 2025, also would provide $6 million for engineering and technical experts to support enforcement efforts, such as determining whether a license was required for an export that already took place.

“We do see significant efforts by wrongdoers to divert AI chips, as well as other products that are export controlled,” Kessler testified. “We see those more commonly than you might expect, and we have enforcement operations that are active to address those types of activities. I’m concerned that we’re not catching all of it, that there’s a lot that goes undetected, and this budget is intended to enable us to catch more of it and prevent more wrongdoing.”

Reps. Bill Huizenga, R-Mich., and Sydney Kamlager-Dove, D-Calif., the subcommittee’s chairman and ranking member, respectively, both welcomed BIS’s request for more funding. Huizenga said the request includes a 133% uptick in enforcement funding, “a bold and necessary step” to ensure adversaries can’t access U.S. technology. Kamlager-Dove said the agency's resources haven't kept pace with its increased workload.

While most of the BIS budget increase would go toward personnel, some funding also would be allocated to equipment for those new employees, Kessler said. Kessler also said that BIS needs to modernize its antiquated information technology and that money for that purpose is included in the House-passed One Big Beautiful Bill Act.

Rep. Jefferson Shreve, R-Ind., said he intends to introduce a bill to allow BIS to hire "leading technologists" for one-year terms to help the agency keep pace with innovation and “craft smarter, faster policy." Kessler told him the proposal “sounds very useful.”

Rep. Gregory Meeks, D-N.Y., ranking member of the full committee, said the Commerce Department has yet to send its FY 2026 budget justification documents to Congress. He urged Kessler to quickly provide those detailed spending plans to lawmakers.

Despite its current funding constraints, the agency has been “firing on all cylinders” during the first few months of the Trump administration, such as by adding more than 80 parties to its Entity List and working with the Justice Department to secure 22 criminal convictions, Kessler said.

Asked by Kamlager-Dove why BIS, during the Trump administration, hasn’t added “a single company to the Entity List in relation to Russia’s war on Ukraine, effectively allowing our controls to deteriorate,” Kessler said “there hasn’t been any pause” on actions toward Russia. “If we identify Russian parties that we believe should be added to the Entity List, we would do that,” he added.

Asked by Kamlager-Dove why companies have complained to Congress about delays in receiving export licenses, Kessler said that may be because the licensing process has received more scrutiny during his tenure.

“I have been carefully reviewing the licensing process,” he said. “There has been a problem in the past with BIS rubber-stamping license applications, including, it appears, those that are for products that go to China and technologies that go to China and other adversaries. I view that as a problem and when I came into office, I decided that one of the first things I would do was to take a close look at the licensing process.”

Kessler declined to say whether the U.S. has agreed to ease any of its export controls as part of a recently announced trade deal with China (see 2506110044). “The details are still to come and discussions are going on now between the governments, so I’m not going to comment on the content of those discussions,” he said. “What I will say is that export controls have been strong and I’m confident that they will remain strong in the future, including with respect” to AI and other technologies of concern. Kessler participated in a “limited set” of the London talks that led to the deal.

Rep. Keith Self, R-Texas, said he plans to introduce a bill to require companies on the Entity List or Military End User List to be automatically joined on those lists by subsidiaries in which they own at least 50%. Kessler said he would have to review the legislation but agrees there are “loopholes” that need to be addressed.

Asked by Self what should be done about companies that design chips that are just below the threshold that triggers export restrictions, Kessler said he believes BIS needs to precisely set technical parameters for its controls. “In a sense, I don’t blame companies for trying to continue shipping products to China that are not controlled,” he said.

Kessler offered no timeline on when BIS will replace the recently rescinded AI diffusion rule (see 2506040042), but he defended the decision to repeal it, saying the chip-related export controls were “bureaucratic, heavy-handed and drew arbitrary distinctions between different countries.”

Kessler said more work needs to be done to ensure the U.S. and its allies are aligned on export controls. He said he would be willing to invoke the foreign direct product rule to discourage the “backfilling” of U.S. companies.

He was specifically asked how he will approach convincing countries like Japan and the Netherlands to align with U.S. controls on sensitive chip equipment and technology.

"We need to make sure that for all of these critical technologies, our allies are fully aligned," Kessler said. There "has been some progress, particularly with respect to the Netherlands and Japan, but it's incomplete. The task is incomplete, and more needs to be done."

He added that the "best outcome is when they willingly impose controls" in coordination with the U.S. "But yes, where that's not possible, I think that we should consider the foreign direct product rule," Kessler said.

Asked by Kamlager-Dove how the U.S. will ensure that new chip deals with the United Arab Emirates and Saudi Arabia will protect American technology (see 2505190041), Kessler said chip exports to those countries will require BIS approval.

“The governments that we made deals with are very much aware of the security requirements that we have when we export AI chips,” he said. “Those have been a topic of discussion.”

Before any exports could occur, BIS would ensure “rigorous security requirements are in place, and we would enforce those requirements,” Kessler said. For example, if the chips were destined for an overseas data center, BIS would make sure that the data center operator and any cloud service provider are “trusted, that they have demonstrated that they can fulfill rigorous security requirements both with respect to who can access the computing power and also physical security. It would also include the personnel that work at those facilities. It would include the companies deploying know-your-customer requirements to make sure that there are not shell companies illegally diverting.”

Asked by Rep. Tom Kean, R-N.J., about his bill to require the administration to develop a strategy to block China and other “foreign adversaries” from buying goods and technologies to build, maintain or operate undersea cables (see 2504040009), Kessler said he would be willing to work with the lawmaker on that.

After the hearing, Kessler said he’s open to assessing a Huizenga bill that would require export-controlled advanced computing chips to contain location verification mechanisms to prevent diversion. “It should be seriously considered,” he told Export Compliance Daily. Huizenga introduced the Chip Security Act in May (see 2505150035).

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