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U.S. Announces Plans for Technology Export Controls

The U.S. Department of Commerce (“Commerce”)  Bureau of Industry and Security may soon implement export controls for certain emerging technologies, as per a November 19, 2018 posting. Under the authority of the Export Control Reform Act of 2018, Commerce is authorized to “establish appropriate controls, including interim controls, on the export, reexport, or transfer (in country) of emerging and foundational technologies” that are “essential to the national security of the United States.” Commerce defines “emerging technologies” as including 14 general categories, including biotechnology, artificial intelligence, advanced computing technology, and robotics.  It is seeking public comment on “criteria for identifying emerging technologies that are essential to U.S. national security” in order to formulate new export rules under the Commerce Control List.

Commerce states that this identification process must consider: (i) how emerging technologies develop in foreign countries, (ii) how potential export controls could impact domestic development of such technologies, and (iii) the true effectiveness of export controls on limiting emerging technology development in foreign countries. Akin Gump Strauss Hauer & Feld, a prominent Washington law and lobbying firm, comments that this public request for comments starts a “complex, intellectually challenging and economically significant effort” to identify specific technologies that may warrant potential export controls and/or CFIUS oversight.

As previously detailed in China Institute Investment Tracker blog posts here and here, the U.S. has taken recent steps to scrutinize foreign investment with an implicit focus on China. Trade tensions, alleged intellectual property theft, and national security concerns have driven American policymakers to closely examine foreign investment in sensitive sectors and update the regulatory framework. With concerns over Chinese cyber-spying and political influence in the U.S., in addition to the ongoing trade war, Commerce is taking steps to protect emerging technology from foreign influence.

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