The Commerce Department’s efforts to block China and Russia’s access to American-made advanced computer chips have been “inadequate” and do more to curb their ability to make advanced weapons, according to a report published Wednesday by the Senate Permanent Subcommittee on Investigations. Money will be required.
The Biden administration imposed export controls to limit the ability of China and Russia to access U.S.-made chips following Russia’s invasion of Ukraine nearly three years ago.
According to the report, the agency’s Bureau of Industry and Security does not have the resources to enforce export controls and relies heavily on US chipmakers voluntarily complying with the rules.
But the push to boost export control enforcement of commerce comes as the incoming Trump administration says it wants to dramatically reduce the size and scope of the federal government. President-elect Donald Trump has chosen entrepreneurs Elon Musk and Vivek Ramaswamy to lead a new “Department of Government Efficiency” to dismantle parts of the federal government.
The Trump transition team did not immediately respond to a request for comment on the report.
The BIS budget, approximately $191 million, has remained essentially constant since 2010 when adjusted for inflation.
“Although BIS’s budget has been stagnant for a decade, the bureau works diligently around the clock to fulfill its mission and protect U.S. national security,” Commerce Department spokesman Charlie Andrews said in a statement in response to the report.
Andrews said that with “necessary resources from Congress” the agency “will be better equipped to address the challenges that come with our evolving national security environment.”
In a letter to Commerce Secretary Gina Raimondo on Wednesday, the subcommittee’s chairman, Democratic Senator Richard Blumenthal of Connecticut, pointed to news reports of the Russian military continuing to acquire components from Texas Instruments through major companies in Hong Kong, so that To clarify how the export takes place. Controls are failing as an effective tool.
In a statement, Blumenthal called on “Commerce to take immediate action and crack down on companies that are allowing American-made semiconductors to power Russian weapons and Chinese ambitions.”
Texas Instruments said it opposes the use of its chips in Russian military equipment and the illegal diversion of its products to Russia.
“It is our policy to comply with export control laws and any shipment of TI chips to Russia is illegal and unauthorized,” the company said in a statement. “If we find evidence indicating product tampering, we investigate and take action.”
This isn’t just a Texas Instruments issue. The subcommittee published a report in September that found total exports to Armenia and Georgia from four major US advanced chip makers nearly doubled from 2021 to 2022.
Both countries are home to leading companies helping Russia obtain advanced American-made chips despite export controls.
Meanwhile, the subcommittee report claims that China has created a “vast, barely hidden smuggling network that enables it to continue using American technology.”
Washington is gradually increasing the number of companies in China affected by such export controls, as President Joe Biden’s administration encourages the expansion of chip manufacturing and investment in the US.
But Chinese companies have found ways to circumvent export controls, in part because of the lack of subject matter experts and Chinese speakers assigned to Commerce’s export control enforcement.
The agency’s current budget limits the number of international end-use investigations, or physical verifications in foreign countries, of distributors or companies receiving American-made chips that are end users of the products. Currently, Commerce has only 11 export control officers spread across the world to conduct such checks, the report said.
The committee made several recommendations in its report, including Congress allocating more funds to hire additional personnel to enforce export controls, imposing larger fines on companies that violate controls, and having export controls of advanced chip companies handled by outside entities. Involves the need for periodic review of plans.