Eric Hirschhorn, BIS chief during the Obama administration, said interactions with industry when reforming export control regulations are vital and warned the agency needs more resources to carry out its mission.
A former Commerce Department official in charge of export controls during the Obama administration told the Senate Banking Committee on Thursday that to ensure these regulations remain impactful and do not harm the economy requires continuous interaction with exporters for their insights and feedback on proposed regulations.
“In the seven years that I did on export control reform, I found the input from industry extraordinarily valuable,” Eric Hirschhorn, who served as undersecretary of commerce and industry at the Commerce Department from April 2010 to January 2017, told members of the Senate Banking Committee.
“The Commerce Department and its sister agencies put forth proposed regulations and said to industry, ‘How does this work?’ ‘Does this work for you?’ ‘Is it too broad?’ ‘Are we catching things that are sold every day all over the world?’ ‘Are we leaving things out that we ought to control?’”
President Barrack Obama mandated in August 2009 that the mostly Cold War-era U.S. export controls, which are administered by the Commerce, State and Defense departments, be updated to reflect current national security threats and economic realities.
A hallmark of this effort was an in-depth review by the administration of the State Department’s U.S. Munitions List (USML), which is part of the International Traffic in Arms Regulations (ITAR), and the shift of less-sensitive components and technologies, including commercial satellites, from that list to the Commerce Control List (CCL).
On Aug. 13, 2018, President Donald Trump signed into law the Export Control Reform Act (ECRA) which codified the regulations and policies within the jurisdiction of the Commerce Department’s Bureau of Industry and Security (BIS).
The ECRA requires BIS to establish appropriate controls on the export, reexport or transfer (in country) of “emerging” and “foundational” technologies.
Specifically, the agency must implement effective controls for those technologies that have potential to fuel foreign weapons manufacturing, intelligence gathering and terrorist activities to the detriment of the U.S. These new technologies may not be currently listed on the Commerce Control List (CCL), which requires specific licensing oversight before being exported abroad.
ECRA requires specific determinations will be made through an interagency process that considers both public and classified information, as well as information from the Emerging Technology Technical Advisory Committee and the Committee on Foreign Investment in the U.S.
Emerging technologies, which are currently on BIS’ future export control radar, are diverse. They include, for example, synthetic biology, computer vision, artificial intelligence cloud technologies, stacked memory on chips, quantum computing, mobile electric power, micro-drone and micro-robotic systems, “smart dust” and propulsion technologies. BIS received more than 200 responses to its November advance notice of proposed rulemaking reviewing emerging technologies.
Foundational technologies, which pose a national security concern but may not be adequately controlled for export purposes, will be considered by BIS soon.
Hirschhorn emphasized to the Senate Banking Committee that industry has the expertise to help the Commerce Department address future emerging and foundational technology export controls.
“I would always say when I spoke to industry groups that ‘believe it or not, the government doesn’t always get it right on its own,’” he told the senators.
“So having that input, which I considered very valuable and free and highly professional, did a great deal toward making export control reform the success I think it was,” he said. “If we can’t get the input of the people who are making this stuff, who are developing this stuff, we can’t assume that government knows enough.”
When asked by Sen. Sherrod Brown, D-Ohio, ranking member of the Senate Banking Committee, whether BIS has adequate resources to carry out its expanding mission, Hirschhorn responded, “No, it does not.
“One of the things that I did at my time [at BIS] was to beg, borrow and steal resources wherever I could get them from Congress, from other parts of the Commerce Department that were maybe a little more flush. … It’s a continuing challenge,” he said.
“If the [BIS] engineer who reviews machine tool [license] applications breaks his leg, you can’t go down the hall to say to the chemist, ‘You’re going to do machine tools for the next three weeks,’” Hirschhorn said. “It’s one deep and needs more resources. I think the budget is around $114 million today and probably should be at least $130 million, maybe more.”
