New Law Requires Commerce to Report on Export of Key Tech to High-Risk Countries

Rep. Ronny Jackson (R-TX) giving remarks on the House Floor. 

President Donald Trump signed a bill on Tuesday, August 19, titled the “Maintaining American Superiority by Improving Export Control Transparency Act” (H.R. 1316). The law amends the Export Control Reform Act of 2018 (ECRA) “to require the Secretary of Commerce to report annually to Congress on applications for dual-use export licenses.” The companion bill in the Senate is S.744.

According to the text of the law, the Secretary must submit an annual report on “end-use checks related to, as well as license applications and other requests for authorization for the export, reexport, release, and in-country transfer of items controlled under this part to covered entities.”

Covered entities are defined as any country listed in Country Group D:5 under Supplement No. 1 to part 740 of title 15, Code of Federal Regulations, which are “U.S. Arms Embargoed Countries.”

According to a footnote to Group D:5 in the Federal Regulations:

“Countries subject to U.S. arms embargoes are identified by the State Department through notices published in the Federal Register. The list of arms embargoed destinations in this table is drawn from 22 CFR 126.1 and State Department Federal Register notices related to arms embargoes and will be amended when the State Department publishes subsequent notices. If there are any discrepancies between the list of countries in this table and the countries identified by the State Department as subject to a U.S. arms embargo (in the Federal Register), the State Department’s list of countries subject to U.S. arms embargoes shall be controlling.”

There are 23 countries presently included in the list.

As outlined in the bill summary, the Department of Commerce’s Bureau of Industry and Security (BIS) currently oversees the export of “dual-use goods (e.g., items with both civilian and military uses) and certain military parts and components,” as outlined by the ECRA through the Export Administration Regulations (EAR). The new law mandates BIS to report on information such as “the name of the entity submitting the application, where the item is being exported, the decision with respect to the license application or authorization, and information on related enforcement activities to ensure compliance with U.S. export controls.”

Representative Ronny Jackson (R-TX) sponsored the bill in the House along with cosponsors Representative Sara Jacobs (D-CA) and Mike Lawler (R-NY). Senator Jim Banks sponsored the bill in the Senate along with cosponsor Mark Warner (D-VA).

Jackson, who is also Chair of the Intelligence Subcommittee on Oversight & Investigations, explained in a statement issued yesterday that the law will “prevent cutting-edge technology from being acquired by our most dangerous adversaries,” pointing to countries like China, Russia, Iran, and North Korea as security risks.

Jackson added in an earlier statement on the bill that “our export controls too often fail to prevent sensitive American technology from being sold to firms tied to the Chinese military.”