New BIS Standards-Setting Bodies Rule ‘Undermines’ US Export Controls, Lawmaker Says
A new Commerce Department rule aimed at making it easier for certain U.S. technologies to be shared at standards-setting bodies will “undermine” U.S. efforts to protect those sensitive technologies from being acquired by China, Rep. Michael McCaul, R-Texas, said. Although the rule, issued last week (see 2209080038), sought to allow the participation of U.S. companies in international standards bodies that have members on the Entity List, McCaul said it also undermines U.S. export restrictions. “Companies that are entity-listed are threats to national security, and we need real safeguards to ensure sensitive technology is not transferred to these bad actors,” said McCaul, the top Republican on the House Foreign Affairs Committee.
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McCaul also said it’s “absurd for BIS to claim their new rule is only for ‘low-level’ technology. The transfer of ‘low level’ technology to the [People’s Republic of China] was the reason Congress had to update [Committee on Foreign Investment in the U.S.] and export controls in 2018.” The lawmaker said the rule “appears to allow unrestricted transfer of potentially sensitive technology within PRC-based standards setting organizations or those under [Chinese Communist Party] control. Now a listed CCP company can utilize a standard setting body to force the transfer of U.S. tech to China.”
Industry officials for years have urged the Bureau of Industry and Security to publish the rule, saying U.S. companies have ceded leadership to China in international technology standards development because they fear violating U.S. licensing requirements (see 2202100039). In the rule, BIS said the “uncertainty of not knowing whether other entities listed on the Entity List are participants in standards organizations and whether a BIS license is required to release low-level technology for legitimate standards activities” has caused U.S. companies to “limit their participation” in those bodies. A BIS spokesperson pointed to the agency's news release last week, which included comments from senior agency officials who stressed that U.S. companies need to be "fully engaged" in standards bodies.
The rule was met with praise from several industry groups. The American National Standards Institute said "continued unrestricted access to all relevant standards forums, regardless of the technology area, while respecting national security constraints, is critical to U.S. competitiveness." The Information Technology Industry Council applauded Commerce for "issuing an updated rule that fully enables U.S. and multinational companies to participate in international standards development activities."
Although the interim final rule took effect Sept 9, BIS is accepting public comments through Nov. 8.