In a recent development, House Foreign Affairs Committee Chairman Michael McCaul (R-TX) and House Select Committee on the Chinese Communist Party Chairman Mike Gallagher (R-WI) have sent a letter to National Security Advisor Jake Sullivan, urging the White House to address concerns related to the Department of Commerce’s export control procedures.
The letter emphasizes that their concerns lie not with export controls themselves but rather with the administrative processes that surround their implementation. They argue that these procedural failures could potentially jeopardize U.S. national security and foreign policy interests.
The lawmakers cite the case of Semiconductor Manufacturing International Corporation Incorporated (SMIC) as a prominent example of these concerns. They assert that despite apprehensions expressed by U.S. officials, SMIC has made significant strides in semiconductor technology, prompting questions about the efficacy of existing export controls.
The members stress the importance of export controls in the context of national security and foreign policy. They point out that the October 7, 2022 rules were established to address the utilization of advanced semiconductors in China’s military modernization efforts and human rights violations, including the development of weapons of mass destruction and advanced surveillance systems. They also highlight the growing significance of export controls in the realm of cybersecurity.
The letter outlines several steps that the Department of Commerce’s Bureau of Industry and Security (BIS) should take promptly to address these concerns:
- Update and Issue Final October 7, 2022 Rules: BIS should revise these rules to prevent potential workarounds concerning advanced semiconductor and tool exports to China.
- Take Immediate Action Against SMIC and Huawei: Given their alleged repeated violations of U.S. law and their association with China’s military, SMIC and Huawei should face comprehensive blocking sanctions, effectively severing their access to U.S. technology and the U.S. financial system.
- Close the Cloud Computing Loophole: BIS should take measures to prevent Chinese firms from bypassing the October 7 rules and entity listings by classifying the provision of cloud computing as a licensable activity.
- Enforce the 60-Day Rule for Moving Entities from the Unverified List (UVL) to the Entity List: BIS should discontinue the practice of granting exemptions to its own rule, which mandates that entities on the Unverified List (UVL) failing to undergo an end-use check within 60 days be automatically shifted to the Entity List.
The letter underscores the need for a timely review of export control procedures to bolster their enforcement and protect national security interests. It also highlights the ongoing discourse surrounding the effectiveness of export controls in addressing evolving national security challenges within the technology sector.
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