House Passes Bill to End Export Control 'Loophole' for Chips

The House approved several export control-related bills late Sept. 9, including the Remote Access Security Act, which is designed to close a loophole that has allowed China to use cloud service providers to access advanced U.S. computing chips remotely (see 2409040046).

Sponsors of the cloud measure said Chinese companies have exploited the loophole to get around U.S. export controls on chips and develop artificial intelligence technology for China’s military. "China is our number one geopolitical foe and should have absolutely no way to access and steal American tech for their own nefarious purposes," said Rep. Mike Lawler, R-N.Y., who introduced the bill with three other lawmakers in April (see 2405060048).

Although the bill’s prospects in the Senate are unclear, Lawler said he plans to “work with colleagues in both parties and both chambers to ensure it becomes law as swiftly as possible."

Other bills that cleared the House include:

• Export Control Enforcement and Enhancement Act, which would allow the Defense, Energy and State departments to propose additions to the Commerce Department’s Entity List (see 2407100058)
• Maintaining American Superiority by Improving Export Control Transparency Act, which would require regular reports to Congress on where licensed dual-use goods are being sent abroad (see 2312130053)
• Sanctions Lists Harmonization Act, which would require an agency that adds an entity to its export control or sanctions list to notify other agencies about its actions (see 2312130053)
• Economic Espionage Prevention Act, which would authorize sanctions on foreign adversaries that support Russia’s defense industrial base, violate U.S. export controls or steal U.S. intellectual property (see 2405160062)
• No Russian Tunnel to Crimea Act, which would impose sanctions on foreign persons who contribute to the construction of a tunnel from Russia to Crimea (see 2403210076)
• amendment to the Export Control Reform Act that would add protecting American trade secrets to the list of responsibilities of U.S. export control agencies (see 2312130053)
• Securing Global Telecommunications Act, which would require the State Department to develop a strategy to promote the use of secure telecommunication infrastructure in countries other than the U.S.
• Foreign Adversary Communications Transparency Act, which would require the Federal Communications Commission to annually publish a list of entities that hold an FCC license and have ties to China, Cuba, Iran, North Korea, Russia or Venezuela.

The House on Sept. 11 is expected to take up a bill that would permanently add the agriculture secretary to the Committee on Foreign Investment in the U.S. to review agricultural transactions (see 2409050011).

Although legislation to restrict outbound investment to China has not made it onto the House’s agenda this week despite earlier suggestions that it might (see 2407080046), House Foreign Affairs Committee Chairman Michael McCaul, R-Texas, said he still hopes to get an outbound bill passed. He continues to seek a compromise between lawmakers who favor imposing restrictions on individual entities and those who would rather target whole technology sectors (see 2401180067).

“We’re working on that compromise bill,” McCaul told Export Compliance Daily Sept. 10. House Speaker Mike Johnson, R-La., “is committed to getting it done.”

Meanwhile, the Senate, which has been working for months to develop a major China bill (see 2408200014), continues to negotiate the contents of the legislation, Senate Foreign Relations Committee Chairman Ben Cardin, D-Md., said. "I hope we'll have some progress during this month," he said.