Home Money & Business Business Report reveals US measures to limit advanced computer chip access for China and Russia are ‘insufficient’

Report reveals US measures to limit advanced computer chip access for China and Russia are ‘insufficient’

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Report reveals US measures to limit advanced computer chip access for China and Russia are ‘insufficient’

The efforts by the Commerce Department to limit access to advanced American computer chips for China and Russia have been deemed “insufficient” and require additional funding to effectively prevent these nations from developing sophisticated weaponry, as per a report released on Wednesday by the Senate’s Permanent Subcommittee on Investigations.

Since Russia’s invasion of Ukraine nearly three years ago, the Biden administration has put export controls in place to restrict China and Russia’s ability to acquire U.S.-manufactured chips. However, the report indicates that the Bureau of Industry and Security (BIS) lacks adequate resources for enforcing these controls and has leaned heavily on U.S. chip manufacturers to voluntarily comply with the regulations.

This call for stronger enforcement comes at a time when the incoming Trump administration has indicated its intent to significantly downsize the federal government. President-elect Donald Trump has appointed entrepreneurs Elon Musk and Vivek Ramaswamy to spearhead a new “Department of Government Efficiency” aimed at dismantling various federal agencies.

The transition team for Trump has not yet responded to inquiries regarding the report. The BIS has been functioning with a budget of approximately $191 million, which has not seen any significant increases since 2010 when adjusted for inflation.

In response to the report, Commerce Department spokesperson Charlie Andrews noted that while the budget for BIS has stagnated over the last decade, the bureau continues to tirelessly work towards its mission of protecting U.S. national security. He also emphasized that with essential resources from Congress, the agency could be more effectively equipped to meet the demands of an evolving national security landscape.

In a letter addressed to Commerce Secretary Gina Raimondo, Democratic Senator Richard Blumenthal of Connecticut, who heads the subcommittee, highlighted how reports indicate that the Russian military is still able to source components from Texas Instruments via front companies based in Hong Kong, underscoring the inadequacy of current export controls.

Blumenthal criticized both the need for Congress to enhance BIS’s funding and the necessity for BIS to utilize its existing enforcement powers more robustly to impede the flow of American semiconductors into Russia’s military operations. He also urged the Commerce Department to act swiftly against firms enabling the use of U.S.-made chips for both Russian military efforts and ambitions from China.

The issue extends beyond Texas Instruments, as a prior report from the subcommittee revealed that the collective exports from four major U.S. advanced chip manufacturers nearly doubled to Armenia and Georgia between 2021 and 2022. These countries are known for hosting front companies that facilitate Russia’s access to advanced U.S. chips despite the existing export restrictions.

Additionally, the report states that China has established extensive and covert smuggling networks to continue utilizing U.S. technologies. In response to these challenges, Washington has progressively broadened the scope of companies subject to these export controls but has faced obstacles in curtailing Chinese firms’ ability to navigate around these directives due to a shortage of experts fluent in Chinese tasked with overseeing the enforcement efforts.

The limited budget of the Department has hindered its capacity to conduct international end-use checks, which entail physical verification of the entities that receive American-made chips. Presently, the department has only 11 export control officers globally assigned to perform these checks.

In its report, the committee issued multiple recommendations, including increased funding from Congress for hiring more personnel dedicated to enforcing export controls, imposing stiffer penalties on companies breaching these regulations, and mandating regular assessments of export control plans for advanced chip manufacturers by external auditors.