The effort by the Commerce Department to restrict China’s and Russia’s access to U.S.-made advanced computer chips has been deemed “insufficient,” according to a new report from the Senate’s Permanent Subcommittee on Investigations, which was released on Wednesday. The report indicates that increased funding is necessary to limit these nations’ capabilities to produce sophisticated weaponry.
Following Russia’s invasion of Ukraine nearly three years ago, the Biden administration imposed export controls aimed at reducing the ability of both China and Russia to obtain advanced chips manufactured in the U.S. The Bureau of Industry and Security (BIS), part of the agency, reportedly lacks adequate resources to enforce these controls and has overly depended on the voluntary compliance of American chip manufacturers.
Simultaneously, the call for enhanced export enforcement comes as the incoming Trump administration intends to significantly scale back 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 reducing areas of federal program.
The Trump transition team has not yet provided a comment regarding the findings detailed in the report. The BIS budget, which stands at roughly $191 million, has been virtually unchanged since 2010 when inflation adjustments are considered.
Responding to the report, Commerce Department spokesperson Charlie Andrews noted that despite the stagnant budget, BIS employees work tirelessly to fulfill their mission of safeguarding U.S. national security. He also mentioned that with “essential resources from Congress,” the agency would be better prepared to tackle the challenges posed by the evolving national security landscape.
In his communication to Commerce Secretary Gina Raimondo, Democratic Senator Richard Blumenthal of Connecticut highlighted reports regarding the Russian military’s continued procurement of components from Texas Instruments through front companies based in Hong Kong, emphasizing the ineffectiveness of export controls. Texas Instruments has not responded to requests for comments regarding this matter.
Blumenthal stated that while Congress must enhance BIS’s resources to fulfill its critical role, it is crucial that BIS make full use of the enforcement powers granted by Congress and adopt assertive measures to obstruct the flow of U.S. semiconductors into Russia’s military operations. He also urged the Commerce Department to take swift action against companies allowing U.S.-made semiconductors to support Russian weapons and advance Chinese ambitions.
The issue doesn’t rest solely with Texas Instruments, as earlier findings from the subcommittee indicated that total exports from four major advanced chip manufacturers in the U.S. nearly doubled to Armenia and Georgia from 2021 to 2022. These nations are known for harboring front companies that aid Russia in its pursuit of advanced chips despite existing export controls.
On the other hand, China is claimed to have established extensive, yet subtly disguised, smuggling networks to continue utilizing U.S. technology, according to the committee’s findings. As the Biden administration pushes for more investments and manufacturing of chips within the U.S., it also works on broadening the range of companies impacted by export controls aimed at China.
However, Chinese firms have managed to circumvent these controls, partially due to a shortage of individuals with expertise in China and the absence of Chinese-speaking staff within the Commerce Department’s export control enforcement team. The current budget constraints limit the scope of international end-use checks, which are essential for verifying overseas disbursement of American-made chips. Currently, there are only 11 export control officers deployed globally to perform such verification efforts.
The committee issued several recommendations, including urging Congress to allocate more funds for hiring additional personnel to fortify export control enforcement, imposing stricter penalties on companies breaching these regulations, and mandating regular evaluations of the export control strategies of advanced chip manufacturers by external reviewers.
