The Commerce Department’s lengthy rollout of export controls over emerging and foundational technologies may be impeding congressionally mandated export control reform measures and the work of the Committee on Foreign Investment in the U.S., the Congressional Research Service said in a report Aug. 21. Commerce’s effort, mandated by the Export Control Reform Act of 2018, has resulted in several export control notices, including on geospatial imagery software (see 2001030024) and items agreed to by multilateral control bodies (see 2006160034). But Commerce has yet to release its advance notice of proposed rulemaking for foundational technologies (see 2008040008), and the pace of the controls has frustrated some in industry (see 2002040057 and 1911070014).
Exports to China
A top U.S. intelligence official urged companies to avoid supply chains involving Huawei, and said there is a strong push within the administration to bolster domestic production of 5G technologies. Constance Taube, National Counterintelligence and Security Center deputy director, said U.S. companies should approach Huawei and other Chinese state-controlled companies with a high degree of skepticism, saying their supply chains will ultimately benefit from more trusted actors.
Flir Systems, a U.S.-based producer of thermal imaging cameras, is being investigated for possible export control violations, the company said in an Aug. 6 filing with the Securities and Exchange Commission. Flir said it voluntarily disclosed the potential violations to the State, Commerce and Justice departments in 2017.
The Chinese government is placing more of an emphasis on infiltrating U.S. companies and universities to steal export controlled technologies, said John Demers, the U.S. assistant attorney general for national security. China has increasingly turned to its intelligence agencies, such as the Ministry of State Security, to embed officials in U.S. institutions, Demers said.
The U.S. should stop restrictive trade measures against China, which are hindering the phase one trade deal between the two countries, China’s Assistant Commerce Minister Ren Hongbin told told reporters Aug. 13.
The worsening U.S.-China trade relationship is continuing to hurt U.S. companies, which are increasingly losing Chinese customers to European, Japanese and domestic Chinese firms, U.S.-China Business Council officials said. But despite the rising tensions, USCBC President Craig Allen said he is hopeful China will meet its phase one purchase commitments, and said the two sides should begin discussing phase two during an expected meeting between trade officials this week.
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U.S. export controls are set to become more of a factor at universities worldwide as U.S.-China technology competition accelerates, forcing academic institutions to adjust to an expanding basket of regulations and compliance standards, a Hinrich Foundation report said. Colleges, which already struggle with insufficient government export control guidance (see 2005120053), need to be prepared for increased controls on software and networks, placement of foreign universities on blacklists and bans on certain foreign funding, the report said.
The U.S. will boost restrictions on software companies connected to China, Secretary of State Mike Pompeo said, adding that the administration is focused on increasing penalties on businesses associated with human rights abuses in the Xinjiang region. Pompeo said the companies’ use of facial recognition and artificial intelligence software -- two areas the Commerce Department is reviewing for stricter export controls (see 2007220050) -- aids the Chinese military and helps to suppress Muslim minority groups.
The U.S. on July 31 sanctioned a Chinese state-controlled organization and two Chinese officials for human rights violations in Xinjiang. The sanctions target the Xinjiang Production and Construction Corps, former XPCC Party Secretary Sun Jinlong and XPCC Deputy Party Secretary Peng Jiarui.