export-controls 13 September 2018

US legislation gives BIS greater powers

The US Department of Commerce’s Bureau of Industry and Security (‘BIS’) has been given statutory authority under the Export Control Reform Act (‘ECRA’), to control certain exports. The act was signed into law by President Trump on 13 August.

The ECRA is the permanent legislative basis for the Export Control Regulations (‘ECR’) and codifies existing rules on BIS’s oversight of certain exports of sensitive technology. BIS’s authority over the EAR was previously authorised by an emergency declaration under the International Emergency Economic Powers Act (‘IEEPA’) and executive orders renewed on an annual basis.

The new legislation also paves the way for an expanded role for BIS to establish and lead a new inter-agency probe to identify ‘emerging’ and ‘foundational’ technologies crucial to US national security. These new technologies are likely to include artificial intelligence, microelectronics and driverless vehicle technology. It also grants BIS wider powers to investigate breaches of export control.

The passing of the ECRA is part of the US government’s wider process of reforming the Committee on Foreign Investment in the United States (‘CFIUS’), the inter-agency government panel which reviews the national security implications of the foreign acquisition of US companies. On the same day as the ECRA became law, the Foreign Investment Risk Review Modernization Act (‘FIRRMA’) was passed. Both Acts bolster US export and investment controls to address concerns that critical US technologies may end up in the hands of foreign powers, such as China, which has been accused of the theft and exploitation of US technologies through state-backed entities.