BIS 'Completely Failing' to Stop Sensitive Tech Exports to China, Former DOD Official Says

A former Pentagon official expected to testify before Congress May 11 said U.S. officials for years have “refused” to fix failures in its export control system that allow China to acquire sensitive technologies. Stephen Coonen, who spent nearly 14 years in the Defense Technology Security Administration, including as its senior foreign affairs adviser for China, said he resigned from the agency in 2021 to protest the Bureau of Industry and Security’s “willful blindness” surrounding its export policies.

“My sole motive is to speak out against a broken system in hopes of reforming it,” Coonen wrote in a report released May 10 by China Tech Threat, a Strand Consult-run organization that advocates for stronger export controls on China. “American export control policies are completely failing to stop the transfer of militarily useful American technologies to China.”

Coonen, who is scheduled to testify before the House Foreign Affairs Committee, listed several recommendations for BIS, saying the agency should set a default license review policy of presumption of denial for all National Security (NS)-controlled technologies bound for China. The same presumption of denial policy should also apply to a wider range of exports to China, he said, including “specific types of integrated circuits, key gas turbine engine technologies, certain composite materials, and technologies used in the development of hypersonic engines.”

He also said Congress should give greater authority to the State, Energy and Defense departments to “influence the outcomes of license reviews for controls where they have the largest equity stake.” Although each agency is already involved in the license review process led by BIS, Coonen suggested Congress give “final transfer decision authority” to DOD for commodities controlled for NS reasons. The State Department should have more authority over items controlled for regional stability reasons, he said, and the Energy Department should mainly oversee nuclear technologies. BIS has a “track record of rubber-stamping export licenses,” he wrote.

Another change could extend the 30-day timeline agencies have to review transfer requests to China, Coonen wrote. Agencies should be allowed 90 days, 180 days or even one year to review some requests, he said. “The additional time will permit more meaningful analysis of potential military applications, give the intelligence community more time to research potential end uses, and provide export control officers with additional time to conduct pre-license checks.”

Coonen also said Congress should require the administration to renegotiate its agreement on end-use checks with China; give DOD, the State Department and Energy Department more authority to establish export controls on technologies that “fall primarily under their purview”; and order the Government Accountability Office to audit the “extent of BIS disregard” for other agencies’ input in the license review process. The U.S. also should establish a new multilateral export control regime “to deal with the rapidly changing realities impacting international security.”

He said these recommendations could help the U.S. correct “its ineffective policies,” adding that the government “has yet to fully recognize, or admit, how its own insufficient technology transfer and export control policies are strengthening the Chinese military.” Coonen said U.S. export control policies are allowing American companies to supply the Chinese military “with the very capabilities that could be deployed against the United States in a future conflict.”

He accused “senior decision-makers” at the Commerce Department of being “preponderantly influenced by industry voices advocating against tighter export controls,” adding BIS is plagued by “bureaucratic obstinacy.” The agency “routinely” ignores recommendations from other agencies when assessing commodity classifications and fails to coordinate with other agencies on license applications.

“An immediate course correction to U.S. export control regulations and policies is required to ensure that U.S. technologies do not further facilitate China’s military modernization efforts,” Coonen wrote. Changes to export control policies and regulations “should form the basis for the U.S. to lead partners and allies to establish more meaningful controls and even form a new multilateral export control regime.”

A BIS spokesperson didn’t respond to a request for comment.

Coonen will testify before the House as part of a BIS oversight effort underway by Rep. Michael McCaul of Texas, the top Republican on the House Foreign Affairs Committee (see 2211020027). McCaul, one of Congress' most outspoken critics of the agency, has accused BIS of approving too many license applications to China (see 2303060013 and 2110210073) and has been critical of BIS' export enforcement efforts (see 2302210010 and 2301300052).