Yesterday the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) took its first step towards a potentially significant expansion of U.S. export controls by publishing a Federal Register notice soliciting public comments on how the U.S. government should regulate the export of “emerging technologies.” Under the Export Controls Reform Act of 2018 (ECRA), “emerging and foundational technologies” will be subject to additional export controls and will trigger heightened foreign investment reviews for U.S. companies that produce or develop these technologies. Commerce has requested public comments on the “criteria for defining and identifying emerging technologies” by December 19, 2018. Commerce will begin a separate comment process regarding “foundational technologies” at a later date.
BIS regulates the export of “dual-use” and less sensitive military items through the Commerce Control List (CCL) and the Export Administration Regulations (EAR). Section 1758 of the ECRA, enacted in August 2018 as a part of the National Defense Authorization Act for Fiscal Year 2019, requires BIS to establish “appropriate controls” for the export, re-export, or in-country transfer of “emerging and foundational technologies” that “are essential to the national security of the United States” but are not yet subject to U.S. export controls. While Commerce will have the discretion to set the level of export controls for any identified emerging and foundational technologies, at a minimum it must require a license for the export of these technologies to countries subject to a U.S. arms embargo. (Section 126.1 of the International Traffic in Arms Regulations (ITAR) identifies several countries, including China, currently subject to an arms embargo by the United States.) Continue Reading