The Commerce Department’s Bureau of Industry and Security (“BIS”) recently published an advanced notice of proposed rulemaking asking for public comment on criteria to identify “emerging technologies that are essential to U.S. national security,” for example because they have potential intelligence collection applications or could provide the United States with a qualitative intelligence advantage.

BIS is the federal agency that primarily oversees commercial exports. Over the summer, Congress passed the Export Control Reform Act of 2018 and authorized BIS to establish appropriate controls on the export of emerging and foundational technologies. Although by no means exclusive or final, BIS has proposed an initial list of areas that may become “emerging technologies,” including artificial intelligence/machine learning technology, brain-computer interfaces, and advanced surveillance technology, such as faceprint and voiceprint technologies. If BIS ultimately determines a technology will be subject to export controls, it will likely receive a newly-created Export Control Classification Number on BIS’s Commerce Control List and would require a license before export to any country subject to a U.S. embargo, including arms embargos (e.g., China).

BIS will incorporate the public’s response, along with information from the Emerging Technology Technical Advisory Committee, the Committee on Foreign Investment in the United States (“CFIUS”) and classified sources, to consider:

  • The development of emerging and foundational technologies in foreign countries;
  • The effect export controls may have on the development of such technologies in the United States; and
  • The effectiveness of export controls on limiting the proliferation of emerging and foundational technologies in foreign countries.

BIS will accept public comments on this topic through December 19, 2018.

Update: BIS has extended the public notice deadline to January 10, 2019.

Our take

This request for comment is a preview of the U.S. government’s attempt to update its export regulations to keep pace with real world technology. Companies participating in high tech industries (particularly those listed in the notice) should consider submitting a comment before the 12/19/18 deadline. However, even companies who are simply “end users” of such technologies should keep their antennae up for future rules that may restrict their use in domestic and foreign commerce.

Lastly, the ultimate scope of “emerging technologies” will influence several other business transactions and government entities, including CFIUS, wherein foreign investment transactions involving emerging technologies may be subject to mandatory filings and a national security review. See our client alert on parallel CFIUS updates here.