Under Secretary McCormick Provides Update on BIS Military Catch-All Proposal at CSIS
Under Secretary of Commerce for Industry and Security David McCormick, gave a speech last Friday on U.S.-China high technology trade at the Center for Strategic and International Studies (CSIS) in Washington, DC. While the speech focused on U.S.-China high technology policy issues, most of the attendees were interested in hearing additional details about the Bureau of Industry and Security's proposed China military "catch-all" regulation. The highlights of Under Secretary McCormick's speech and answers to questions from the audience included:
- The proposed regulation, which will be published in the "coming weeks", "is not a wide-ranging 'catch-all regulation' that subjects everything from fountain pens to office furniture to government scrutiny. Rather, these changes carefully target certain technologies that, while unrestricted until now, have the potential to materially enhance China's military capabilities."
- Announced that for certain technologies on the commerce control list, the proposed China catch-all rule will include the creation of a certified Chinese importer program. U.S. exporters will not need to apply for export licenses to export certain identified technologies to these companies in China.
- To become eligible for the "certified importer" program, Chinese companies must "demonstrate an established record of nonproliferation and responsible civilian use of U.S. imports."This program will require "unprecedented openness and cooperation on the part of Chinese companies" and will "create incentives for them to demonstrate good faith and sound practices."
- Expects that the regulation will cover 47 categories of products, such as composites, electronic components, and other items on the Commerce Control List that can enhance China's military capabilities.
- U.S. will continue to conduct on-the-ground spot checks in China to reduce the risk that civilian exports are diverted to third parties or to China's own military purposes.
- The list of "certified importers" will be made public to assist U.S. exporters in determining export licensing requirements.
- The regulation will be published as a proposed rule with a 120 comment period.
The mp3 audio file of Friday's speech and the question and answer session is available on CSIS's website at: www.csis.org/component/option,com_csis_events/task,view/id,1005/.