BIS Nominee, Advanced by Senate Panel, Commits to 'Vigorous' Enforcement
The Senate Banking Committee voted 13-11 along party lines July 23 to approve David Peters' nomination as assistant secretary of commerce for export enforcement.
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Sen. Elizabeth Warren, D-Mass., the committee’s ranking member, called Peters “woefully unprepared for this role.” At his nomination hearing in June (see 2506130035), “he couldn’t even answer a basic question” on whether the U.S. should impose “robust safeguards” to ensure the Trump administration’s new AI deals with the United Arab Emirates and Saudi Arabia don't result in chip diversions to China, Warren said.
At the hearing and in newly released written answers to Warren’s questions, Peters said that creating such safeguards would be the role of the Office of Export Administration, not export enforcement.
Also in his written answers, Peters said he would “commit to vigorous and fair enforcement” of export control laws and would “consider the full range of penalties available" to him. He would “welcome the opportunity to consult with the committee regarding potential additional tools and resources that BIS may need.” He would also work with BIS colleagues and the committee to ensure the agency provides “clear red flag guidance to the private sector.”
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}), Peters gave a one-word response: “Yes.” In March, during his own nomination process, BIS Undersecretary Jeffrey Kessler declined to say yes or no in response a similar question but committed to reviewing the case (see [Ref:2503060043).
To address Chinese firms that create “front companies” to get around being on BIS’s Entity List, Peters said he would follow laws and regulations for “adding and removing entities" from the list, "including entities that are related to other entities that are already" listed. Asked whether he would automatically apply an Entity List designation to all subsidiaries and affiliates of an added party, he said he would ensure the list "remains an effective tool to prevent diversion, transshipment, and unlawful re-export of our sensitive technologies."
BIS is considering implementing a 50% rule for parties on the Entity List, which could extend the list’s export license requirements to companies that are majority owned by entities on the list see (see 2506100047 and 2507010051).
Asked whether those who divert or smuggle U.S. items to Russia’s war machine should be added to the Entity List, Peters said he would follow laws and regulations for making changes to the list.