US government relies on outdated manual processes to enforce restrictions on Chinese tech companies
Recent reports have revealed that the U.S. government agency responsible for export licensing controls meant to keep sanctioned technology from reaching certain countries is old and incredibly outdated. The Bureau of Industry and Security (BIS) said Tuesday that it’s struggling under a massively increased workload thanks to an outdated and almost entirely manual system.
In a review of its recent work (PDF) overseeing trade with China and other countries, BIS outlined its struggles to keep up with the work. The report discussed the expansion of the Entity List, the manual processes used to handle export license applications, and the need to modernize those systems and processes.
The United States maintains an Entity List of foreign persons, companies, institutions, and government agencies. For U.S. manufacturers to export certain technologies to those on the Entity List, they must submit a licensing application. The list was introduced in 1997 to inform the public of entities that might divert technology and resources to the production of weapons of mass destruction.
Over the years, however, the scope of the Entity List has expanded greatly. In fact, the Entity List now includes foreign persons who could be involved in things that go against national security in a more broad sense. Because of the increased scope, the size of the Entity List rose from 218 in 2018 to 787 in 2023.
Over those years, BIS processed almost 4,000 license applications. The agency says there was a “substantial” increase in 2019 and 2020 when Huawei and SMIC were added to it. While this may not sound like an onerous workload, it’s all handled mostly by hand. For one thing, the report notes, “regulatory changes and world events of the past two decades have significantly increased the volume of export license applications and the complexity of export licensing decisions.”
The process used to collect licensing data was designed in 2006 and relies heavily on manual processes. BIS says this method consumes a considerable amount of its resources and includes a heightened risk of human error. While the bureau is working to improve its internal systems and processes, there’s still a heavy need for human interaction. Furthermore, the agency noted that its foundational systems were never designed to communicate seamlessly with one another.
Since the need for export controls will not disappear anytime soon, BIS is continuing to modernize its platform. The report notes the agency’s commitment “to working with Congress to secure additional funding for critical investments in modernizing its central licensing system.”
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