Commerce Department Requests Public Comments for Emerging Technologies’ Export Controls

On November 19, 2018, the Commerce Department’s Bureau of Industry and Security published an advance notice of proposed rulemaking (ANPRM) in the Federal Register seeking public comment on criteria for identifying and defining “emerging technologies” essential to US national security. The categories of emerging technology discussed in the ANPRM are currently subject to lower level U.S. export controls, for example EAR99 and anti-terrorism controls.

BIS seeks information from the public to determine if stricter controls are needed, if, for example, the emerging technologies contribute to potential conventional weapons, intelligence collection, weapons of mass destruction, or terrorist applications or other national security concerns. Comments are due by December 19, 2018.

BIS published the ANPRM as required by Section 1758 of the Export Control Reform Act of 2018 (ECRA), which was passed last summer and kicks off an interagency process to identify new unilateral export controls. Initially, any new export controls on emerging technologies will affect only US companies and non-US recipients of US technology. However, ECRA requires the US Government to persuade other countries to add these controls to multilateral control lists within three years. Even if new US controls on emerging technologies do not result in multilateral controls, the US Government can determine that national security concerns warrant keeping the controls in place after the three year period.

Emerging Technology Categories Identified by BIS in the ANPR

BIS is considering imposing new export controls on the following 14 broad categories:

(1) Biotechnology such as: (i) Nanobiology; (ii) Synthetic biology; (iv) Genomic and genetic engineering; or (v) Neurotech.

(2) Artificial intelligence and machine learning technology, such as: (i) Neural networks and deep learning (e.g., brain modelling, time series prediction, classification); (ii) Evolution and genetic computation (e.g., genetic algorithms, genetic programming); (iii) Reinforcement learning; (iv) Computer vision (e.g., object recognition, image understanding); (v) Expert systems (e.g., decision support systems, teaching systems); (vi) Speech and audio processing (e.g., speech recognition and production); (vii) Natural language processing (e.g., machine translation); (viii) Planning (e.g., scheduling, game playing); (ix) Audio and video manipulation technologies (e.g., voice cloning, deepfakes); (x) AI cloud technologies; or (xi) AI chipsets.

(3) Position, Navigation, and Timing technology.

(4) Microprocessor technology, such as: (i) Systems-on-Chip (SoC); or (ii) Stacked Memory on Chip.

(5) Advanced computing technology, such as: (i) Memory-centric logic.

(6) Data analytics technology, such as: (i) Visualization; (ii) Automated analysis algorithms; or (iii) Context-aware computing.

(7) Quantum information and sensing technology, such as (i) Quantum computing; (ii) Quantum encryption; or (iii) Quantum sensing.

(8) Logistics technology, such as: (i) Mobile electric power; (ii) Modeling and simulation; (iii) Total asset visibility; or (iv) Distribution-based Logistics Systems (DBLS).

(9) Additive manufacturing (e.g., 3D printing)

(10) Robotics such as: (i) Micro-drone and micro-robotic systems; (ii) Swarming technology; (iii) Self-assembling robots; (iv) Molecular robotics; (v) Robot compliers; or (vi) Smart Dust.

(11) Brain-computer interfaces, such as (i) Neural-controlled interfaces; (ii) Mind-machine interfaces; (iii) Direct neural interfaces; or (iv) Brain-machine interfaces.

(12) Hypersonics, such as: (i) Flight control algorithms; (ii) Propulsion technologies; (iii) Thermal protection systems; or (iv) Specialized materials (for structures, sensors, etc.).

(13) Advanced Materials, such as: (i) Adaptive camouflage; (ii) Functional textiles (e.g., advanced fiber and fabric technology); or (iii) Biomaterials.

(14) Advanced surveillance technologies, such as: Faceprint and voiceprint technologies.

In addition to a review of emerging technologies, in the future, BIS will publish a notice regarding the identification and imposition of new export controls on “foundational technologies.” However, BIS likely would accept submissions for “emerging” and “foundational technologies” in comments submitted under this ANPRM.

When and How to File Comments

BIS has requested comments on:

1. How to define emerging technology to assist identification of such technology in the future;
2. Criteria to apply to determine whether there are specific technologies within these general categories that are important to US national security;
3. Sources to identify such technologies;
4. Other general technology categories that warrant review to identify emerging technology that are important to US national security;
5. The status of development of these technologies in the United States and other countries;
6. The impact specific emerging technology controls would have on US technological leadership; and
7. Any other approaches to the issue of identifying emerging technologies important to US national security, including the stage of development or maturity level of an emerging technology that would warrant consideration for export control.

Comments from the general public should be submitted in writing to BIS by December 19, 2018.

You may submit comments through either of the following:

• Federal eRulemaking Portal: The identification number for this rulemaking is BIS 2018-0024.
• By Mail or Delivery To: Regulatory Policy Division, Bureau of Industry and Security, U.S. Department of Commerce, Room 2099B, 14th Street and Pennsylvania Avenue NW, Washington, DC 20230. Refer to RIN 0694-AH61. 

If you do file comments, you should assume that your full comments will be available to the public as well as to other government agencies.

Accordingly, you should not include in your comments, or documents accompanying your comments, any proprietary or other sensitive data that you do not want to become publicly available or otherwise disseminated.

Given that the comment topics are seemingly pro-controls, companies may want to wait to see what comes out of the ANPRM and then file comments when more specific controls are announced. At this early stage, it is unclear if any new controls will actually affect a company’s products. Further, companies that file comments may risk drawing attention to their technologies. On the other hand, carefully handled, this ANPRM comment period does provide an opportunity to influence the discourse on how the emerging technology identification process will work.

Further Actions by BIS

BIS will very likely impose new export controls on emerging technologies because Congress is keenly observing how this ECRA-mandated requirement is implemented and the initiative has the support of the Trump Administration.  BIS and other government agencies may take several months to analyze and fully develop draft EAR regulations. We expect the public will have another opportunity to comment on the proposed rules in 2019.

China is not explicitly mentioned in the ANPRM but is a likely target for the new controls. Section 1758 of the ECRA requires, at a minimum, licenses to embargoed and arms embargoed countries, which includes China, except in special circumstances.

“Emerging Technologies” Will Also Be Considered in CFIUS Reviews of Foreign Investment in the US

On a parallel but separate track, on October 18, 2018, the Treasury Department’s Committee on Foreign Investment in the United States issued regulations creating a new pilot program to further examine foreign acquisitions of certain interests having a US nexus (See new 31 CFR Part 801). This pilot program expands the scope of what transactions by foreign persons  are reviewable by CFIUS, and includes investments by foreign persons in certain US businesses that produce, design, test, manufacture, fabricate, or develop one or more “critical technologies." For purposes of this pilot program, “critical technologies” includes, but is not limited to, emerging technologies controlled pursuant to Section 1758 of the ECRA. (See 31 CFR 801.204(f)).

Thus, while this BIS ANPRM directly relates only to new export controls on emerging technologies under the EAR and not to CFIUS issues, the “emerging technologies” identified by BIS will become “critical technologies” for CFIUS-related purposes.