Raimondo Says BIS Needs More Funding, Will Publish Chips Act Guardrails Soon

The Bureau of Industry and Security needs more resources to investigate export control violations, Commerce Secretary Gina Raimondo said this week. She also said a potential government shutdown would be “crushing” for the agency’s enforcement efforts and work on semiconductor export regulations.

Raimondo, speaking during a Sept. 19 House Science, Space and Technology Committee hearing, said BIS needs more money specifically to continue hiring employees for its export control work as the U.S. tries to stop China from acquiring sensitive American technologies. The agency’s Office of Export Enforcement recently used government funding to hire 16 new special agents, six intelligence analysts and two new export control officers (see 2306010044), but Raimondo said BIS needs more help.

“I would say to everyone here, BIS needs more funding,” she said, adding that the agency could use more export enforcement agents and technology and technical experts. “Increasingly, national security is about technology and keeping our edge over China, staying ahead of them,” Raimondo said. “And so we have to control this technology so it doesn't wind up in the Chinese military.”

She added that “once upon a time,” BIS “wasn't necessarily as important as it might be today.” But the importance of its mission has increased as Commerce focuses more on maintaining the U.S. lead in several technologies, Raimondo said, specifically mentioning artificial intelligence and quantum. “That's all tech where America leads,” she said. “So if you want us to protect that fully and vigorously and enforce that, we do need more resources, more people and more technical people who work with us.”

Asked how a potential government shutdown would impact Commerce, Raimondo said: “It would be crushing.” Current government funding expires Sept. 30 unless Congress approves new spending bills or passes legislation to extend the deadline.

Raimondo said she is often asked by members of Congress: “How come you’re not moving faster” on the Chips Act, and “Where's this? Where's that?” The agency is “literally working seven days a week to go as fast as we can,” she said, but “if there's a shutdown, it'll come to a grinding halt.”

“There is no question in my mind this shutdown will hurt America's national security, at least as it relates to my work, export control enforcement, export control work,” Raimondo said, adding that it also will delay the agency’s work on dispersing Chips Act funding. “It all stops, and every dollar and every day that we aren't working puts us greater at risk.”

Commerce in March released proposed “guardrails” for recipients of Chips Act funding, which could restrict how the funding is used in certain countries and align those guardrails with export restrictions (see 2303210026). She told the committee that Commerce won’t approve funding under the Chips Act until it finalizes the proposed guardrails, which she expects to happen “very, very soon.”

“I'm trying to move as fast as I possibly can. But more important than going fast, we need to get it right, especially with respect to these guardrails,” she said. “So we have to be absolutely vigilant that not a penny of this helps China to get ahead of us, and that none of these companies who receive our money do any research with China or investment in China that in any way undermines our own national security.”

Raimondo also was asked about Huawei, which earlier this month announced a new smartphone using a 7 nanometer chip that lawmakers say may have been developed using means that violated U.S. export controls (see 2309120005 and 2309150020). BIS has said it’s investigating the matter, although Raimondo declined to provide details.

Rep. Darrell Issa, R-Calif., said Huawei purposefully timed its announcement with Raimondo’s recent visit to China (see 2308300036). “You were bushwhacked, to say the least, by the launch of the 5G phone,” he said. “That wasn't an accident. They chose you as an important symbol of their accomplishment.”

Raimondo said Commerce is “trying to use every single tool at our disposal -- BIS, enforcement, patents -- to deny the Chinese an ability to get intellectual property to advance their technology in ways that can hurt us.”

“I was obviously -- I don't know what the right word is -- upset when I saw the Huawei announcement,” she said. But the “good news” is “we don't have any evidence that they can manufacture 7 nanometers at scale,” Riamondo said.

“And although I can't talk about any investigations specifically, I promise you this: Every time we find credible evidence that any company has gone around our export controls, we do investigate.”