The U.S.’s new export restrictions over certain biological equipment software could have a major impact on life science companies, universities and research organizations, and could present significant foreign investment screening hurdles, law firms said. While the restrictions were issued multilaterally and will only seek to stop certain software exports that can be exploited for biological weapons purposes, firms warned that the new restrictions could still be difficult to manage.
The Bureau of Industry and Security should work to raise export enforcement awareness and prioritize deterrence through large penalties, said Matthew Axelrod, President Joe Biden’s nominee to oversee BIS enforcement work. Speaking during his nomination hearing last week, Axelrod highlighted BIS’s yearslong lack of Senate-confirmed leadership in the Office of Export Enforcement and said his background as a federal prosecutor makes him the right fit for the role.
The Bureau of Industry and Security is considering requesting public comments on new export controls for certain brain-computer interface (BCI) technology. The agency sent the pre-rule for interagency review Oct. 5 and said it hopes to determine whether BCI represents an emerging technology important to U.S. national security and whether “effective controls can be implemented.”
The Senate Banking Committee this week approved the nominations for two senior Bureau of Industry and Security officials but reached a tie vote on two other nominees slated to oversee the Treasury Department’s sanctions work.
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The export control jurisdiction for exports of deuterium for non-nuclear end-uses will transfer from the Nuclear Regulatory Commission to the Bureau of Industry and Security, BIS said in notice. While those exports will be controlled under the Export Administration Regulations, BIS stressed that deuterium exports intended for nuclear end-uses will still be subject to the NRC’s export licensing jurisdiction. BIS has been considering the change, which will take effect Dec. 6, since at least June (see 2109240011).
The Bureau of Industry and Security made a range of “corrections and clarifications” to the Export Administration Regulations to fix inadvertent errors in 11 parts of the EAR, the agency said in a notice. The changes, effective Oct. 5, aim to “provide clarity and facilitate understanding of the regulations” but don’t “change the substance of the EAR,” BIS said. The agency said it made “minor” changes” to EAR parts 732, 734, 736, 738, 740, 744, 748, 750, 770, 772 and 774.
The Bureau of Industry and Security will add export controls on certain biological equipment software that may be exploited for biological weapons purposes (see 2109290011), the agency said in an Oct. 5 final rule. The rule, issued in proposed form in November 2020, will align U.S. controls with the multilateral Australia Group by placing restrictions on exports of “nucleic acid assembler and synthesizer” software “capable of designing and building functional genetic elements from digital sequence data,” BIS said. The agency said the software will be added to the Commerce Control List as an emerging technology and falls under BIS’s efforts under the Export Control Reform Act (see 2109080062).
While too early to declare a success, the U.S.-European Union Trade and Technology Council has set both sides on a path toward tangible progress on more export controls and investment screening collaboration, experts said. During the inaugural TTC meeting last week, the U.S. and EU agreed to develop “convergent” export controls and share more information to catch malign foreign investments (see 2109290083), which could result in meaningful changes within the next year, the experts said.
The Bureau of Industry and Security has faced challenges applying some of its new export control rules during the last year, including its military end-use and end-user regulations and broader semiconductor-related policies toward China, a senior BIS official said. Matt Borman, BIS’s deputy assistant secretary for export administration, said he recognizes the rules may also be causing compliance challenges for industry, and the agency is considering more guidance.