The Bureau of Industry and Security officially announced this week that it plans to rescind the Biden administration’s AI diffusion export control rule and issue a “replacement rule in the future.” The agency also issued new guidance about how using Huawei Ascend chips and other Chinese chips likely violates U.S. export controls, published recommendations for companies to protect their supply chains against “diversion tactics,” and outlined the types of activities involving AI chips and AI models that may trigger a license requirement.
Nature’s Sunshine Products, a dietary supplement manufacturer headquartered in Utah, may have violated U.S. sanctions and export controls, it disclosed this month.
The Bureau of Industry and Security officially announced May 13 that it plans to rescind the Biden administration’s AI diffusion export control rule and issue a “replacement rule in the future.” BIS enforcement officials won't be enforcing the Biden-era rule, the agency said, which was scheduled to take effect May 15. The agency said it plans to publish a formal rescission notice in the Federal Register.
The Trump administration’s request for an increased budget allocation for the Bureau of Industry and Security (see 2505020030) signals that export enforcement will be one of the administration's top priorities, said Gregory Allen, director of the Wadhwani AI Center at the Center for Strategic and International Studies.
Companies must spend more resources on export compliance, and governments need to do a better job of coordinating and updating multilateral export control lists, in order to prevent Russia, Iran and other “rogue actors” from buying as many sensitive dual-use goods, researchers said this week.
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The first few weeks of Undersecretary Jeffrey Kessler’s tenure at the Bureau of Industry and Security have been defined by industry uncertainty and skepticism toward career government and business officials, industry members and BIS staff said.
Exporters and other companies could start seeing an uptick in government subpoenas as the Bureau of Industry and Security looks to increase export penalties, industry officials said this week, adding that businesses should make sure they’re scrutinizing transactions and watching for red flags.
Taiwan Semiconductor Manufacturing Company may face a fine of up to $1 billion or more if the Commerce Department determines it violated U.S. export control laws against Huawei, Reuters reported April 8. The Bureau of Industry and Security has reportedly been investigating the chip company after one of its chips was found in a Huawei product (see 2411120011 and 2410230019), and Reuters said Commerce could reach a $1 billion penalty because export control regulations allow the agency to issue a fine of up to twice the value of transactions that violate the rules. Reuters said it "could not determine how the Trump administration will proceed with TSMC or when the matter would be resolved."
Export Compliance Daily is providing readers with the top stories from last week in case you missed them. You can find any article by searching for the title or by clicking on the hyperlinked reference number.