House Committee Asks BIS for Info on China-Related Enforcement Efforts
House Foreign Affairs Committee Republicans are asking the Bureau of Industry and Security for information on its export enforcement and compliance efforts involving China, including steps to crack down on Chinese transfers of controlled U.S. technology to State Sponsors of Terrorism (SSTs). In a letter sent to BIS last week, Rep. Michael McCaul of Texas, chair of the committee, said he is concerned China’s “economic and trade ties” with terrorism sponsors is “undermining U.S. national security and foreign policy interests.” He and Rep. Michael Lawler, R-N.Y., asked BIS to provide information on recent Chinese export violations, licensing procedures, end-use checks and more by March 2.
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The lawmakers said “recent open-source reporting suggests” China is supplying Iran with “counterfeit copies of Western-origin commodities” used to make drones for Russia. They also pointed to China’s anti-foreign sanctions laws, including recent legislation that “legally mandates companies operating in the [People’s Republic of China] to violate U.S. export control law, or face penalties by PRC authorities. There is serious concern this type of legislation may be weaponized by the PRC against firms that comply with U.S. sanctions and export control laws.”
And because China doesn’t “generally allow proper export control inspections,” including end-use checks, BIS “may not have sufficient visibility and access to guarantee the PRC’s compliance with restrictions on trade with SSTs,” McCaul and Lawler said. “Moreover, without a foreign direct product rule or a 0 percent de minimis threshold for SSTs, BIS undermines its own enforcement efforts through rules that become unworkable.”
The lawmakers asked BIS to “describe in detail” how it monitors and enforces China’s compliance with de minimis, foreign direct product rules and other “enhanced controls” on SSTs, and to provide information on export violations involving China that have occurred since 2016. They also asked whether BIS has “applied an updated licensing regime for any country based on their trade with SSTs”; how China’s anti-sanctions laws have “factored into BIS determinations” on export violations; and information on pre-license or end-use checks BIS conducted in China during calendar year 2021 to “confirm compliance with de minimis, foreign direct product rules, and other enhanced controls on SSTs.”
A Commerce Department spokesperson said the agency will "respond appropriately" to the letter. "Implementing robust export controls to protect our national security is a bipartisan priority, and we look forward to working with the Committee to ensure it has the information it needs, consistent with our legal responsibilities," the spokesperson said Feb. 21. "We look forward to our continuing dialogue with Congress on these important issues.”