What’s in the Commerce Department’s Recent Export Controls on Technology Bound for

On Oct.7, the Department of Commerce’s Bureau of Industry and Security (BIS) announced a new slate of export controls designed to restrict the People’s Republic of China’s (PRC’s) access to advanced semiconductors, supercomputers, and semiconductor manufacturing equipment.

This new filing, experts observe, is the most recent step in a years-long evolution of U.S. export controls policy on technology vis-a-vis China. It follows high-profile actions during previous U.S. administrations against companies like ZTE, Huawei, and SMIC. The filing also comes on the heels of an important speech in September by National Security Adviser Jake Sullivan. In it, he articulated a new U.S. approach to technology export controls:

On export controls, we have to revisit the longstanding premise of maintaining “relative” advantages over competitors in certain key technologies. We previously maintained a “sliding scale” approach that said we need to stay only a couple of generations ahead. 

That is not the strategic environment we are in today. 

Given the foundational nature of certain technologies, such as advanced logic and memory chips, we must maintain as large of a lead as possible.

In general, the new interim final rule does three things. First, it imposes new controls targeting chips above certain performance thresholds, computer commodities containing those chips, and so-called supercomputers. Second, it imposes new controls targeting the items used to manufacture those chips and on end-user controls that govern the activity of U.S. persons potentially supporting the development of chips destined for military use. Third, it establishes measures to minimize the short-term effects of the first two on supply chains.

What follows is an effort to distill the rule and present its most significant changes in clear language over four parts. 

Legal Authority and Strategic Rationale

U.S. export control policy is the purview of several executive branch agencies, including the Departments of Commerce, State, Treasury, Homeland Security, Justice, and Defense. Their authority stems from a range of laws, beginning with the Export Administration Act of 1979.

The new rule draws authority primarily from the Export Control Reform Act (ECRA) of 2018. Through the ECRA, Congress charged the executive branch with using export controls in support of several U.S. foreign and national security policy objectives, including to control items that might be used for weapons of mass destruction proliferation, terrorism, or other ends; to preserve the qualitative military superiority of the United States; to protect human rights; and to preserve U.S. leadership in science and technology, among others.

The strategic logic of BIS’s Oct. 7 filing reflects these concerns and the approach outlined in Sullivan’s speech. In short, advanced semiconductors and commodities that contain those chips, as well as so-called supercomputers, are fueling the PRC’s military modernization and enabling surveillance that violates human rights.

On military modernization, BIS argues that these technologies enable the PRC to develop advanced artificial intelligence (AI) applications that can in turn be used to:

improve the speed and accuracy of its military decisionmaking, planning, and logistic, as well as its autonomous military systems, such as those used for cognitive electronic warfare, radar, signals intelligence, and jamming. Furthermore these advanced computing items and “supercomputers” are being used by the PRC to improve calculations in weapons design and testing including for WMD, such as nuclear weapons, hypersonics and other advanced missile systems, and to analyze battlefield effects.

On surveillance, BIS argues that AI tools “are being used by the PRC without regard for basic human rights to monitor, track, and surveil citizens, among other purposes.”

Given these risks, BIS writes, the Oct. 7 controls:

[seek] to protect U.S. national security and foreign policy interests by restricting the PRC’s access to advanced computing for its military modernization, including nuclear weapons development, facilitation of advanced intelligence collection and analysis, and for surveillance. BIS intends to impose controls on items subject to the [Export Administration Regulations (EAR)] and U.S. person activities to limit the PRC’s ability to obtain advanced computing chips or further develop AI and “supercomputer” capabilities for uses that are contrary to U.S national security and foreign policy interests.

To supplement these controls, BIS’s Oct.7 rule also imposes export controls on certain items used to manufacture semiconductors, and connects these items to the same risks. While semiconductor manufacturing equipment holds “great commercial promise in areas such as communications, healthcare, and transportation,” BIS states, it can also be used to “produce various [integrated circuits] for [weapons of mass…