BIS Pressing Industry, Allies to Cut Tech Flows to Russia, Official Says

The Bureau of Industry and Security is encouraging industry and foreign countries to do more to ensure American high-tech products don't end up in Russian weapon systems, a Commerce Department official said April 10.

During a hearing of the Senate Homeland Security and Governmental Affairs Subcommittee on Emerging Threats and Spending Oversight, Kevin Kurland, Commerce’s deputy assistant secretary for export enforcement, said he has talked with major companies and trade associations about steps they can take to prevent diversion of U.S. components to Russia.

“There’s a recognition that these components are ending up in places that they shouldn’t be,” Kurland said. “We need industry to do a better job of hardening their supply chains, and we’re making specific asks of them to try to do that.” Those “asks” include voluntarily stopping sales to suspicious companies, and developing “more effective distributor relationships” so companies can determine who the end users of their components are.

Kurland also said the U.S. is taking a “whole of government effort to bring pressure” on third countries that Russia is believed to be using to circumvent export controls.

Kurland’s comments came in response to questioning from Sen. Richard Blumenthal, D-Conn., who leads another subcommittee’s investigation on how Russia overcame export controls and sanctions to obtain U.S. technology for its military (see 2402270065 and 2403050004). "This system is not working and I want to know why," Blumenthal said. "That's the purpose of the investigation we're conducting."

Asked by Sen. Maggie Hassan, D-N.H., about reports that Russia imported Taiwan-made machine tools to make weapons, Kurland noted that Taiwan in February added 77 machine tool items to its list of goods subject to export controls on Russia and Belarus (see 2402160032).

BIS also is helping Taiwan boost its export control enforcement, said Kurland, who visited the country last month. BIS has an export control officer based in Taiwan for a year and is seeking in its FY 2025 budget request to make the posting permanent. “We have a person that’s working every day with the Taiwanese authorities to get them to increase their capacity,” he said.

To improve its own enforcement efforts, BIS has a pilot program that uses artificial intelligence to synthesize vast amounts of information. The agency is requesting $3 million in FY 2025 to continue the pilot, Kurland said.

Sen. Mitt Romney, R-Utah, wondered whether the U.S. government should address the diversion problem by requiring companies to track “certain highly sensitive items” sent to countries that are not part of the Global Export Control Coalition. “I’m looking for what are the solutions to this because it ain’t working now,” Romney said. “There’s a great effort on our part but they’re finding ways around it.”

Deputy Assistant Attorney General Eun Young Choi testified that Section 702 of the Foreign Intelligence Surveillance Act has helped DOJ “glean insights” into illicit transfers of technology. She urged Congress to reauthorize Section 702, which expires April 19.

James Mancuso, assistant director of the Global Trade and Investigations Division at Homeland Security Investigations, said his agency has stepped up its enforcement activities for export controls, as well as sanctions. He testified that Russian efforts to procure U.S. technology led to an 85% increase in Russian-tied HSI case initiations from FY 2022 to FY 2023.