The U.S. Department of Commerce’s initiatives to restrict access to advanced American computer chips for China and Russia have been deemed insufficient, highlighting the need for increased funding to effectively hinder their capacity to produce sophisticated weapons, as detailed in a report released by the Senate’s Permanent Subcommittee on Investigations.
Following Russia’s invasion of Ukraine nearly three years ago, the Biden administration established export controls aimed at limiting the availability of U.S.-manufactured chips to both China and Russia. However, the report indicates that the Bureau of Industry and Security (BIS) lacks adequate resources for enforcing these controls and has overly depended on voluntary compliance from U.S. chip manufacturers.
This call for enhanced enforcement occurs against the backdrop of the incoming Trump administration’s intentions to significantly reduce the scale and operations of the federal government. President-elect Donald Trump has appointed figures like Elon Musk and Vivek Ramaswamy to spearhead a new “Department of Government Efficiency” that aims to dismantle various governmental divisions.
The Trump transition team did not provide immediate comments regarding the findings in the report. The BIS budget has been stagnant, sitting around $191 million since 2010 when adjusted for inflation.
In a statement addressing the report, Commerce Department spokesperson Charlie Andrews emphasized that while BIS’s budget has not changed for a decade, the bureau diligently works to fulfill its mission and protect U.S. national security. He also mentioned that with the necessary support from Congress, the agency could be better prepared to tackle challenges posed by the evolving security landscape.
Democratic Senator Richard Blumenthal of Connecticut, who leads the subcommittee, wrote to Commerce Secretary Gina Raimondo underscoring recent reports about the Russian military’s continuing procurement of components from Texas Instruments via intermediary companies in Hong Kong, showcasing the ineffectiveness of current export controls.
Blumenthal urged Commerce to take decisive measures to curb companies facilitating the use of U.S. semiconductors in Russian military efforts and ambitions in China. Texas Instruments, meanwhile, stated its opposition to the use of its chips in Russian military applications and is committed to complying with export control regulations.
They asserted that any unauthorized shipments of their products to Russia are illicit and that the company investigates any signs of product diversion. However, the subcommittee report released in September also noted significant aggregated exports from four leading U.S. advanced chip makers to Armenia and Georgia, where known front companies assist Russia in acquiring these advanced chips.
China, on the other hand, has reportedly established extensive smuggling networks that allow it to access U.S. technology despite export restrictions, according to the same subcommittee report. Washington has been expanding the list of companies subjected to these export controls in China, as President Biden’s administration advocates for increased investments and manufacturing capabilities within the U.S.
Nonetheless, Chinese firms have managed to bypass these export controls partly due to insufficient personnel with expertise in Chinese matters and language at the Commerce Department’s enforcement division. The current budget limits the number of in-person checks on international end-uses, which are crucial for verifying the ultimate recipients of American-made chips.
Presently, there are only 11 export control officers globally tasked with conducting such checks, putting significant strain on the effectiveness of enforcement. The committee’s report includes several recommendations, such as urging Congress to allocate additional budgetary funds for hiring more personnel for export control enforcement, increasing penalties for companies that violate these controls, and mandating periodic reviews of compliance plans by external entities.
