WASHINGTON — Republicans are using their brand-new House majority to push for tougher China sanctions enforcement on dual-use equipment even as the Biden administration greatly expands sweeping new export controls on U.S. technology that could be used by the Chinese military.
The new House Foreign Affairs Committee chairman, Mike McCaul of Texas, has launched a three-month review of the Commerce Department’s Bureau of Industry Security in response to his more than two-year-old requests on export control licenses that the agency has granted for China. Throughout the course of the review, congressional staffers are mulling potential reforms to the process, ranging from public reporting requirements to more drastic measures like moving the Bureau of Industry Security to the Pentagon or another department.
“Our government doesn’t have time to complain that these problems are tough,” McCaul said in a Sunday statement after a Wall Street Journal report on advanced U.S. microchips found in China’s leading nuclear weapons research lab. “We need solutions.”
The chairman first announced the review on Jan. 20 in a letter to Commerce Secretary Gina Raimondo, noting that the Bureau of Industry Security had “failed to uphold its legal obligation to produce requested documents and information” to the Foreign Affairs Committee. When the bureau adds a Chinese company such as semiconductor manufacturer SMIC or telecommunications giant Huawei to its export control list, it must then approve or deny license requests from U.S. tech companies to export their equipment to China.
“That’s the main thing we need from them,” McCaul told Defense News in a hallway interview on Capitol Hill last week. “How many licenses were declined, and where did they go?”
McCaul’s requests to the Bureau of Industry Security date back to November 2020, but his January letter did note that the agency has since provided Congress with a six-month snapshot of its China export controls – which Republicans find concerning.
“It showed that less than 1% [of licenses] were declined and $60 billion went into Huawei and $40 billion went to SMIC,” McCaul said.
Congress received another tranche of data on export control approvals last week, which staffers on the Foreign Affairs Committee are now sifting through. Their findings will inform potential legislative reforms to the Bureau of Industry Security’s export control list.
“We do want a reporting requirement because they never report to the public on export licenses,” said McCaul. “We want a full accounting of that.”
Whether or not the bureau provides a full accounting could influence the scope of any legislation that emerges from McCaul’s three-month review period.
A Republican staffer from the Foreign Affairs Committee previewed other potential export control reforms on the condition of anonymity.
“For a few years now, there’s been chatter about whether there should be one single licensing agency,” the staffer told Defense News, noting that export control regimes are currently split between the State Department’s munitions list and the Commerce Department’s dual-use items list. “Part of what we’re looking to do is figure out if the existing system is the best arrangement or if it should whole-sale be put somewhere else or if different aspects of the export control system should have different agencies as the lead.”
The staffer pointed to legislation introduced last year by Rep. Jim Banks, R-Ind., which would transfer the Bureau of Industry Security from the Commerce Department to the Pentagon’s Defense Technology and Security Administration.
The Bureau of Industry Security did not reply to Defense News’ request for comment.
McCaul and Republicans praised President Biden’s massive expansion of the dual-use export control list last year to include numerous additional restrictions on transferring U.S. technology to Chinese semiconductor and artificial-intelligence companies.
Still, the U.S. had banned the export to Beijing of the semiconductors found in the Chinese nuclear lab since 1997 – highlighting the Bureau of Industry Security’s enforcement challenges even if the Biden administration consistently denies export license requests under its sweeping new microchip regulations.
“The next piece is examining whether or not they approve or deny licenses,” said the staffer. “And for that piece, it’s why transparency to Congress is so important, so we actually see how the policy is being implemented.”
“Whatever rule we come up with, the [People’s Republic of China] is going to try to find ways around it,” the staffer added. “It’s one of those things where it’s somewhat never-ending.”
For his part, McCaul took pains to differentiate his export control review with his concurrent Afghanistan withdrawal investigations and noted that he wants to have “a good working relationship” with Raimondo and the Commerce Department.
“I think we both agree on the same goals,” said McCaul. “They’re very security-minded, which is good for commerce, because usually they’re more industry and not security.”
Bryant Harris is the Congress reporter for Defense News. He has covered U.S. foreign policy, national security, international affairs and politics in Washington since 2014. He has also written for Foreign Policy, Al-Monitor, Al Jazeera English and IPS News.