Proposed Commerce Department Bureau of Industry and Security rules on emerging technologies may not be published until early next year, another sign of delay that has plagued the rules since their November 2018 announcement. Commerce has three emerging technology rule proposals in “various stages of clearance,” Hillary Hess, BIS Regulatory Policy Division director, told Tuesday's Regulations and Procedures Technical Advisory Committee meeting. The agency hopes to publish one proposal before the end of the year, Hess said, urging committee members take any prediction with “at least a handful of salt.” The process has been “very fraught,” she said. “There’s not a lot of year left, but it’s still theoretically possible.” Also at the meeting, restrictions on Huawei were discussed (see 1912110039).
The Commerce Department Bureau of Industry and Security finalized some interagency reviews of Huawei license applications and will begin issuing approvals and denials on a “rolling basis,” said Matt Borman, Commerce deputy assistant secretary-export administration. Secretary Wilbur Ross said the department will "send out the 20-day intent-to-deny letters and some approvals” for U.S. companies to export some things to the Chinese telecom gearmaker. Ross said Commerce got about 290 “requests for specific licenses.” BIS plans to approve at least “several” licenses while denying others, a Commerce spokesperson told us after Borman spoke at the agency's Materials and Equipment Technical Advisory Committee meeting Wednesday. The Semiconductor Industry Association welcomes approvals for licenses that aren't national security threats. “Sales of these non-sensitive commercial products help ensure the competitiveness of the U.S. semiconductor industry, which is essential to national security,” said SIA President John Neuffer.
As the State Department plans guidance for exports of surveillance technology, companies and associations are concerned about consequences of separate Commerce Department efforts to restrict sales of emerging technologies. The stakeholders said in interviews in recent weeks they're growing impatient with a Commerce delay of several months. State will publish its surveillance export guidelines by early January and will make changes based on industry comments, an Information Systems Technical Advisory Committee meeting was told Wednesday.
The Bureau of Industry and Security amended export administration regulations to further restrict exports and re-exports to Cuba, said Monday's Federal Register. The amendments establish a 10 percent de minimis level for Cuba, make its government ineligible for certain donations, and clarify the scope of unlicensed telecom items the Cuban government can receive. BIS amended a license exception authorizing certain exports and re-exports intended to support people through improved living conditions, to clarify authorization of certain items for telecom infrastructure upgrades is limited to infrastructure that improves “the free flow of information to, from, and among the Cuban people.” A license is required for exports and reexports to connect specific end users, BIS said.
China said it “deplores and firmly opposes” Monday's action of the Commerce Department's Bureau of Industry and Security adding 28 Chinese entities to its trade blacklist for alleged involvement in human rights violations of China’s Uighurs and other Muslim minority groups in Xinjiang province. The human-rights allegations are “merely made-up pretexts” for U.S. interference in China’s “internal affairs,” said a Foreign Affairs Ministry spokesperson Tuesday. The U.S. criticism “is nothing more than fact-distorting gibberish,” he said. The 28 entities include eight China-based technology and science companies, among them Hikvision, a major supplier of video surveillance products. Hikvision opposes the BIS decision as one that "will hamper efforts by global companies to improve human rights" worldwide, emailed a company spokesperson Tuesday. Hikvision "respects human rights," she said. It has been "engaging" with Trump administration officials over the past year "to clarify misunderstandings about the company and address their concerns," she said. The action is effective Wednesday when it's to be published in the Federal Register, and it involves license requirements.
A Bureau of Industry and Security official acknowledged delay in BIS' proposed rulemaking for foundational technologies, saying she and other top Commerce Department officials expected the notice to have been published by now. “I personally thought foundational would be out faster than it is. It was not just higher-level people,” said Hillary Hess, BIS regulatory policy division director, at a Tuesday panel hosted by the American Bar Association. Hess and another official said in June the notice would be released soon (see 1907110044). Hess declined to give an updated timetable now. She briefly said of the proposal for emerging technologies that Commerce has been meeting with “a number of companies” to understand what emerging technologies are most important for U.S. industry and which technologies they’re interested in pursuing. Hess said Commerce created “technical teams” of engineers to tackle emerging tech categories. “They’re basically doing evaluations to look at what should be proposed for control and … what shouldn’t be,” Hess said. It’s possible the teams won’t see a need for new controls, she said. If Commerce issues controls on emerging technologies, Hess suggested the agency wants to do it soon: “We would like to get some stuff out the door.”
The Commerce Department’s Bureau of Industry and Security tried to answer questions from stakeholders about standards organizations' activities that involve Huawei and about its BIS entity listing. It calls for licenses for any activities involving “the exchange, transfer, or other disclosure of technology or software that is of U.S.-origin or is otherwise subject to the” export administration regulations, BIS said Tuesday. Examples include: “participating in a non-public working or study group involving the exchange ... of such technology,” “participating in electronic exchanges within a standards body, by email or other means, that contain or attach such technology or software” and “releasing or otherwise providing access to blueprints, flowcharts, schematics, prototypes, or similar materials that contain such technology.” U.S. carriers using Huawei got more time this week to adjust to restrictions pushed by President Donald Trump involving the company (see 1908190040).
IoT security will exceed $51.42 billion in 2024, with a 22.3 percent compound annual growth rate the next five years, reported BIS Research Friday. It cited “the increasing number of data breaches, growing demand for IoT security regulations and guidelines, and the rising security demand for critical infrastructure.” North America is expected to lead the market in 2019, followed by Europe, and is expected to “maintain its dominance” during the period: “This unprecedented growth in North America is primarily attributed to the efforts made by federal bodies to provide IoT security regulations and guidelines. Moreover, the region is known for being one of the fastest technology adopters with a base to many key players.”
Members of Congress continue introducing or working on bills targeting national security concerns with Chinese telecom equipment manufacturer Huawei, including a pending bill from House Commerce Committee Chairman Frank Pallone, D-N.J., lawmakers and lobbyists told us. Some on Capitol Hill said they're holding out hope that a conference committee to marry the disparate House and Senate versions of the FY 2020 National Defense Authorization Act will agree to include a trio of House-passed amendments that target Huawei and ZTE. But they and others said legislative vehicles and these recent stand-alone bills should be considered as an alternative if the conference process fails to bear fruit.
The House voted 220-197 Friday to pass its version of the FY 2020 National Defense Authorization Act (HR-2500), which includes three amendments addressing concerns about Chinese telecom equipment manufacturers Huawei and ZTE (see 1907110037). One, led by Rep. Mike Gallagher, R-Wis., would impose conditions for the Department of Commerce to lift Bureau of Industry and Security addition of Huawei to its entity list (see 1906190054). A second Gallagher-led proposal would direct the president to submit a report to Congress on ZTE's compliance with a 2018 agreement that lifted Commerce's ban on U.S. companies selling telecom software and equipment to ZTE (see 1807130048). “There are many shortcomings in this year's NDAA, but one positive” is inclusion of the anti-Huawei/ZTE amendments, he tweeted Thursday. Commerce officials said at a BIS conference the department plans to issue multiple guidance documents on its blacklisting of Huawei due to the large number of questions from U.S. exporters. Language from Rep. Ruben Gallego, D-Ariz., would restrict use of telecom equipment made by companies originating in countries that are U.S. adversaries at DOD installations in U.S. territories in the Pacific Ocean. The Senate passed its 2020 NDAA version (S-1790) in June without language from proposed anti-Huawei amendments (see 1906270051). HR-2500 also includes an amendment led by Rep. Norma Torres, D-Calif., that would attach language from the 911 Supporting Accurate Views of Emergency Services (Saves) Act (HR-1629/S-1015). It would change the federal government's classification of public safety call-takers and dispatchers to “protective service occupations" (see 1904050054).