Inside US Trade Quotes Kevin Wolf on New BIS “Foundational Technology” Rules

September 1, 2020

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Akin Gump international trade partner Kevin Wolf has been quoted in the Inside U.S. Trade article “Analysts: BIS ‘foundational’ tech notice suggests a narrow approach.” The article reports on an advance notice of proposed rulemaking by the Bureau of Industry and Security (BIS) that has some thinking the agency is charting a path for a narrower definition of “foundational technologies” that need stricter export controls.

According to the article, an overly broad definition of “foundational technologies” could cover items that are available in other countries, which would make controls ineffective in blocking a foreign adversary from acquiring key technologies, thereby hurting U.S. businesses in the process. While BIS did not fully define what foundational technologies are, Inside U.S. Trade indicates it could mean military end-use or military end-user items such as semiconductor manufacturing equipment and associated software tools.

Wolf said BIS “is trying to find a narrow sweet spot that’s not emerging and not now on the control list that doesn’t cross” any of the safeguards outlined in the Export Control Reform Act (ECRA), which gives BIS little choice but to narrowly implement a definition for foundational technologies. “The beauty of ECRA,” he said, is that even if the Commerce Department believes that steel and aluminum might be national security risks, its viewpoint must be filtered through those ECRA safeguards.

BIS’ definition of “national security” will be key to the implementation of rules on foundational technology, Wolf pointed out, as it could be considered to relate only to weapons of mass destruction, or it might also cover broader strategic capabilities.

Wolf also emphasized that the comment period gives industries the chance to submit valuable input on how a new foundational technologies rule should be written. Currently, he said, the government does not have information on foreign availability and the potential impact a particular control might have.

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