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Fundamental Research, National Security, and Technology Competition

Fundamental research is excluded from export controls jurisdiction. But given growing concerns about alleged Chinese "academic espionage" at American universities and transfers to China of U.S. scientific and technological information and know-how, including through Chinese students, researchers, and others in fundamental and research pipelines, this excerpt is re-posted separately as foreign (particularly Chinese) access to and participation in U.S. fundamental research may be curbed by non-export controls means.

Brain Drain: Emerging Technologies Export Controls Could Spur Tech Inversions

The Department of Commerce, Bureau of Industry and Security, has begun the process of identifying "emerging technologies" that are essential to national security and, consequently, require export control. New export controls on emerging technologies could be burdensome, depending on the content of regulations and the manner of their enforcement. If the new regulatory regime is burdensome to the point that it prohibits (legally or practically) some emerging technology transfers to foreign parties, companies and others involved in emerging technologies-- particularly their development--may seek arrangements, without evading or otherwise violating ECRA or applicable regulations, to ease collaborations and other engagement with foreign parties, including by some form of technology inversion.

BIS Rulemaking on Emerging Technologies Export Controls- Analysis

The Department of Commerce, Bureau of Industry and Security on Nov. 19 published an Advance Notice of Proposed Rulemaking (ANPRM) on the “Review of Controls for Certain Emerging Technologies.” The ANPRM implements the Export Control Reform Act of 2018 and raises diverse legal, regulatory, policy, and commercial issues that cut across sectors and industries. Commerce seeks to advance national security goals without harming the United States’ capacity to lead in science, technology, engineering, and manufacturing. This Regulatory Update provides analysis of the ANPRM, the relevant legal framework, and considerations for commentators.

U.S. Law as Trade War Weapon

The ZTE case puts into focus the Trump Administration’s apparent strategy to use U.S. sanctions, along with anti-corruption and anti-money laundering laws, as trade war weapons, specifically as “economic tools” and “tools of economic diplomacy” that “can be important parts of broader strategies to deter, coerce, and constrain adversaries.”

Technology, Human Rights and Sanctions

Some Congress members are lobbying the Administration to impose human rights sanctions on Chinese officials and companies responsible for or complicit in abuses against China’s Uighur Muslim minority and other minorities. Two companies named, Dahua Technology and Hikvision, are very large, China-based global firms that produce surveillance products and systems. The bottom line is that the tech industry should take note of the development (even if no sanctions are imposed), as it foreshadows the legal and reputation risk issues they will, without doubt, face in connection with tech-enabled abuses, privacy encroachments, and other conduct by consumers of tech products and services.

Huawei Ownership and the Foreign Agents Registration Act

The United States has adopted a whole-of-government approach to counter China’s “economic aggression” or “economic espionage,” umbrella terms that encompass a range of conduct including IP theft, forced technology transfer, academic espionage, and influence operations in the United States. The whole-of-government approach illustrates that the most strategically significant and complex confrontation between the United States and China is not the “trade war.” Rather, the race to dominate future technologies like artificial intelligence and 5G underpins the most complex legal and policy issues between the two nations. The U.S.-China tech war, and the United States’ whole-of-government strategy, has put Chinese technology companies under the hot light of U.S. legal and political scrutiny. Companies like Huawei and ZTE, relative unknowns in the United States until recently, have found themselves on the wrong side of U.S. law enforcement.