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Rep McCaul to Sec Riamondo: Employ Export Controls to Protect Technology Before Confirming BIS Nominee

This week the Wall Street Journal reported that House Foreign Affairs Committee Ranking Member Michael McCaul (R-TX 10th District) and a dozen of his colleagues are “pressuring the Commerce Department to fortify export controls to keep critical American technology from falling into Beijing’s hands.”

That letter, posted here, notes:

“Congress has raised concerns with the implementation of U.S. export control policy toward the [People’s Republic of China] PRC, including failing to sufficiently define emerging and foundational technologies and not designating on the Entity List companies such as Honor and [Yangtze Memory Technologies Corp] YMTC that change their name or ownership structure to evade sanctions or threaten to destroy the market for memory semiconductor chips.”

Several of Congressman McCaul’s suggestions closely reflect those made by former senior Obama Administration Department of Defense official Michael Lumpkin and me in a paper published just two weeks ago for the Center of the Study of the Presidency and Congress.

For example, we recommended that the U.S. Commerce Department’s Bureau of Industry and Security (BIS) add Chinese state-backed semiconductor companies YMTC and ChangXin Memory Technologies (CXMT) to the Entity List. Representative McCaul and his colleagues suggest the same with regard to YMTC.

Similarly, we made the case for employing export controls of foundational technologies including high-end semiconductors and semiconductor manufacturing equipment (SME), like those manufactured by Applied Materials, Lam Research, KLA-Tencor Corp., and Teradyne.

Again, Rep. McCaul also suggests restricting access to key technologies like argon fluoride immersion photolithography and extreme ultraviolet photolithography, and blocking “designs and photomasks for critical semiconductors that are developed using U.S. electronic design automation software.”

Other recommendations from the Members of Congress include:

  • Employing the Foreign Direct Product Rule (FDPR) to stem the Chinese Communist Party’s (CCP) military capabilities and human rights abuses;
  • Updating the licensing policy for the Semiconductor Manufacturing International Corporation (SMIC), China’s largest and partially state-owned contract chip maker;
  • Submitting reports on export control licensing, Entity List, Military End-User List, and the Chinese Military Companies List; and
  • Creating more transparency with regards to the process for identifying emerging and foundational technologies.

We hope that Secretary Raimondo, the BIS, and Congress can work together to implement Ranking Member McCaul’s ideas to help secure the semiconductor supply chain against threats from China.

Andy Keiser is a Fellow at the National Security Institute at the Antonin Scalia Law School at George Mason University and previously served among other positions, as a Senior Advisor to the House Permanent Select Committee on Intelligence. Mr. Keiser also conducts cybersecurity consulting and federal lobbying for several companies, including in the telecommunications and technology sectors.

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