Heightened Scrutiny for “Emerging” Technologies

This week the Bureau of Industry and Security (BIS) published an advance notice of proposed rule-making (ANPRM) seeking comments from the public on criteria for identifying “emerging technologies” essential to U.S. national security. As part of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (NDAA), the Export Control Reform Act of 2018 (ECRA) authorized the Department of Commerce to establish appropriate controls for exports of “emerging and foundational technologies.” However, at the time, what was covered under this phrase was not clear. BIS took a step forward this week by identifying several technology sectors of concern. The ANPRM identified the following 14 categories of technology for further review and public comment:

1. Biotechnology such as nanobiology, synthetic biology, genomic and genetic engineering, or neurotech;
2. Artificial intelligence (AI) and machine learning technology such as neural networks and deep learning (e.g., brain modeling, time series prediction, classification), evolution and genetic computation (e.g., genetic algorithms, genetic programming), reinforcement learning, computer vision (e.g., object recognition, image understanding), expert systems (e.g., decision support systems, teaching systems), speech and audio processing (e.g., speech recognition and production), natural language processing (e.g., machine translation), planning (e.g., scheduling, game playing); audio and video manipulation technologies (e.g., voice cloning, deepfakes), AI cloud technologies or AI chipsets;
3. Position, Navigation, and Timing (PNT) technology;
4. Microprocessor technology such as Systems-on-Chip (SoC), or Stacked Memory on Chip;
5. Advanced computing technology such as memory-centric logic;
6. Data analytics technology such as visualization, automated analysis algorithms, or context-aware computing;
7. Quantum information and sensing technology such as quantum computing, quantum encryption, or quantum sensing;
8. Logistics technology such as mobile electric power, modeling and simulation, total asset visibility, or Distribution-based Logistics Systems (DBLS);
9. Additive manufacturing (e.g., 3D printing);
10. Robotics such as micro-drone and micro-robotic systems; swarming technology, self-assembling robots, molecular robotics, robot compliers, or Smart Dust;
11. Brain-computer interfaces such as neural-controlled interfaces, mind-machine interfaces, direct neural interfaces, or brain-machine interfaces;
12. Hypersonics such as flight control algorithms, propulsion technologies, thermal protection systems, or specialized materials for structures, sensors, etc.;
13. Advanced Materials such as adaptive camouflage, functional textiles (e.g., advanced fiber and fabric technology), or biomaterials; and
14. Advanced surveillance technologies such as faceprint and voiceprint technologies.

Currently, these categories of technology are controlled only to embargoed countries, countries designated as supporters of international terrorism, and for restricted end uses or end users. The Department of Commerce, through an interagency process, will consider whether there are specific emerging technologies that are important to US national security while also balancing needs of the U.S. commercial sector to keep pace with international advancements. As directed by the ECRA, the interagency process to determine emerging and foundational technologies must consider:

• The development of emerging and foundational technologies in foreign countries;

• The effect export controls may have on the development of such technologies in the United States; and

• The effectiveness of export controls on limiting the proliferation of emerging and foundational technologies in foreign countries.

Once identified, the ECRA requires Commerce to impose controls on exports, reexports, and transfers (in-country) of these technologies, taking into consideration the potential end-uses and end-users of the technology as well as the export restricted countries. At a minimum, a license will be required for transactions involving these emerging and foundational technologies to countries subject to a U.S. embargo, including those subject to an arms embargo. This includes not only countries subject to comprehensive U.S. sanctions (Cuba, Iran, North Korea, Sudan, and Syria), but would also apply to countries subject to a U.S. arms embargo, including China, Venezuela, and a number of other countries listed in Country Group D:5 to Part 740 of the Export Administration Regulations (EAR) and identified by the State Department. For companies working in an emerging technology sector, these potential new export controls would limit both physical exports as well as releases of technology to foreign persons (i.e., deemed exports) that may hinder future R&D collaboration and supply chain manufacturing, particularly if China is involved.

From now until Wednesday, December 19, 2018, BIS is seeking comments from industry on the criteria to establish new controls, specifically:

1. how to define emerging technology to assist identification of such technology in the future;
2. criteria to determine whether there are specific technologies within these general categories that are important to U.S. national security;
3. sources to identify such technologies;
4. other general technology categories that warrant review to identify emerging technology that are important to U.S. national security;
5. the status of development of these technologies in the U.S. and other countries;
6. the impact that specific emerging technology controls would have on U.S. technological leadership; and
7. any other approaches to the issue of identifying emerging technologies important to U.S. national security, including the stage of development or maturity level of an emerging technology, that would warrant consideration for export control.

Interested parties, particularly those working in one of the emerging technology sectors above, should consider submitting a public comment to the ANPRM to have their voices heard.