BIS Nominees Vow to Counter Chinese Tech Theft, Prioritize ECRA Effort

Two nominees to lead the Bureau of Industry and Security said they will prioritize stopping illegal technology exports to China and are willing to bypass multilateral controls on certain sensitive technologies if unilateral restrictions are warranted. But Alan Estevez, President Joe Biden’s nominee for BIS undersecretary, and Thea Kendler, the nominee for assistant secretary for export administration, also stressed that export control cooperation with allies is crucial and committed to working to convince trade partners to adopt more controls.

The two nominees fielded questions from the Senate Banking Committee Sept. 21 on a range of export control issues, including the recent transfer of gun exports from the State Department to the Commerce Department, Huawei’s Entity List status, and BIS’s delay in issuing emerging and foundational technology export restrictions under the Export Control Reform Act of 2018. Most of the senators said they were impressed with the qualifications of both Estevez, a former Defense Department official who led the agency’s work on the Committee on Foreign Investment in the U.S., and Kendler, a Justice Department export control prosecutor who is working on the U.S.'s criminal case against Huawei.

“I hope we can work together as a committee to move forward quickly” on these “very qualified” nominees,” said Sen. Sherrod Brown, D-Ohio, chair of the committee.

As the head of BIS, Estevez said he will prioritize “countering transfers of sensitive technologies to China.” While he said multilateral controls are “most effective,” unilateral U.S. controls may sometimes be necessary. “If we don’t use multilateral export controls, it's like damming up half the river,” Estevez said. “With that said, if we need to use unilateral export controls to protect a particular technology, an American technology from being exported, we will do that.” But Estevez stressed that if BIS imposes a unilateral control for a particular technology, he will “work with our allies to show them the data around that and hopefully bring the multilateral regimes into compliance.”

Kendler made similar points but stressed that she will take a hard line around technology exports that may be used for human rights violations. “If confirmed, I will use all of BIS’s tools -- the licensing process, the Entity List, the military end-user list and so on -- to scrutinize licensing applications involving the [People’s Republic of China],” she said. While she committed to working with partners on multilateral controls, she said “I won’t hesitate to use unilateral controls, if necessary, to keep United States technology out of the hands of human rights abusers.”

She also stressed the importance of export enforcement as a means of protecting national security. She said it’s “very important to aggressively use tools like export controls to hold governments, companies and individuals accountable.” But Kendler said it’s also possible to simultaneously protect U.S. national security and U.S. competitiveness, particularly in the semiconductor sector. “We have to look at the complexities of inextricable economic links,” Kendler said. “My priority would be working both to protect national security and to advance our technological edge, if confirmed.”

BIS officials have said they strongly prefer multilateral controls to unilateral ones, particularly surrounding the agency’s efforts to restrict exports of emerging and foundational technologies (see 2109080062). Both nominees said they will prioritize that effort, with Estevez saying he will work on “strengthening our focus” on implementing ECRA. Both also committed to providing the Senate Banking committee regular updates.

Estevez also said he sees “no reason why Huawei would come off the Entity List, unless things change” with Huawei’s behavior. "It's my understanding there's been no change in policy regarding Huawei." He also acknowledged that some Chinese companies have tried to evade U.S. export restrictions, including the Entity List, but didn't say what measures he would take to close those loopholes. “If I’m confirmed, I intend to keep a close eye on” that, Estevez said, adding that the agency will “ensure we're doing the right thing to protect national security with regard to the PRC.”

Estevez also didn’t say whether he supports returning certain weapons export controls from Commerce back to the State Department despite some urging from Sen. Bob Menendez, D-N.J. Menendez and other Senate Democrats have asked the administration to reverse the Trump-era rule, which they said placed less-restrictive controls over a range of lethal weapons (see 2104200027). Biden suggested during his presidential campaign that he would reverse the export control transfer (see 2001170030) but has yet to do so, and the administration hasn't responded to multiple requests for comment on this issue.

“The president can do this by simple regulation without the need for legislative approval,” Menendez said. “But until that happens, the department is providing no information to Congress on what lethal weapons, including sniper rifles, assault rifles and others, are being sold to what countries or foreign persons in what quantities and under what conditions.” Estevez said he didn’t know about the status of that effort because he isn’t yet working for the government. “I will work with the administration on that,” he said. “If that is the direction the president wants to go, I will certainly support it.”