Review of Interagency Dispute Resolution Process

Floor Speech

BREAK IN TRANSCRIPT

Mr. McCORMICK. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 6602) to amend the Export Control Reform Act of 2018 relating to the review of the interagency dispute resolution process, as amended.

The Clerk read the title of the bill.

The text of the bill is as follows: H.R. 6602

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. REVIEW OF INTERAGENCY DISPUTE RESOLUTION PROCESS.

Section 1763(c) of the Export Control Reform Act of 2018 (50 U.S.C. 4822(c)) is amended--

(1) by striking ``In any case'' and inserting the following:

``(1) In general.--In any case'';

(2) by inserting ``countries subject to a comprehensive United States arms embargo,'' after ``matters relating to'';

(3) by striking ``may be decided'' and inserting ``shall be decided'';

(4) by adding at the end the following: ``The chair of the Committee is authorized to decide any case or matter described in the preceding sentence in which the Committee is unable to decide the case or matter by majority vote.''; and

(5) by further adding at the end the following:

``(2) Definition.--In paragraph (1), the term `country subject to a comprehensive United States arms embargo' means--

``(A) any country listed on table 1 to paragraph (d)(1) of section 126.1 of title 22, Code of Federal Regulations (as such section is in effect on the day before the date of the enactment of this paragraph); and

``(B) the Russian Federation.''.

Mr. Speaker, the People's Republic of China, under the leadership of the Chinese Communist Party, is waging an all-out economic war against the United States. The CCP is using unfair and illegal means to try to dominate the market in dual-use technologies that are shaping the modern battlefield.

Fortunately, the CCP still significantly relies on technologies from the United States, our allies, and our partners to develop advanced dual-use capabilities. For that reason, export controls are a critical tool for the United States to slow down and, in some cases, stop China's ability to develop certain capabilities.

For this strategy to work, we have to deny Chinese licenses to use American technology. Unfortunately, based on data reviewed and released by the House Foreign Affairs Committee, those licenses are rarely denied by the Commerce Department's Bureau of Industry and Security, known as BIS.

For instance, during a 6-month period spanning 2020 and 2021, BIS denied less than 2 percent of licenses and approved $100 billion worth of licenses to Huawei and SMIC. Both of those companies are considered CCP military companies by the Department of Defense and are CCP national champion technology firms.

When deciding whether to approve or deny a license, BIS generally consults other agencies that make up the Operating Committee for Export Policy, the Departments of Defense, Energy, State, and Commerce.

However, BIS is not required to follow those other agencies' advice. Sometimes, BIS actively ignores it. Statistics provided by BIS for fiscal years 2017 through 2019 show that there was a 60 percent increase of nonconsensus decisions by the operating committee during that time. In other words, over half the time, 60 percent of the time, they ignored everybody else's objections and went ahead and did whatever they wanted to, just one person's decision. That is not good.

More than 10 percent of the time, it appears the operating committee chair, which is part of the BIS, took the position that only one other operating committee member supported--also not good.

Since the Department of Commerce is both the chair and a member, this data raises concerns that Commerce may be abusing its position on the operating committee to override the considered objections of other agencies. Otherwise, why even be there?

This bill provides a commonsense solution to those dangers: When a license for China comes before the operating committee, the decision to approve or deny the license should be based on a majority vote by all of its members.

Each agency brings a unique view to a license and should have a voice and a vote. It makes little sense for BIS to have sole discretionary and decisional authority on those consequential issues.

In fact, when dealing with satellites and hot section jet engines, the operating committee already requires a majority vote. So my bill simply puts licenses to China on the same level as licenses for certain advanced technologies.

Chairman Xi has ordered his military to have the capability to invade Taiwan by 2027. This is a country that produces 100 percent of the chips in AI that we consume here in America, I might add.

It makes no sense for our Department of Defense to not have a vote on what capabilities may fall into the hands of the Chinese military.

I thank my colleagues on the Foreign Affairs Committee for their unanimous, bipartisan support for this important national security reform bill during the committee markup back in December.

Mr. Speaker, I urge my colleagues to support H.R. 6602, and I reserve the balance of my time.

Mr. Speaker, in closing, I thank Chairman McCaul, Ranking Member Meeks, and my bipartisan colleagues on the Foreign Affairs Committee for supporting this bill before us today.

The committee is made up of a five-member panel with representatives from the Departments of Commerce, Defense, State, and Energy, with the chair being the Bureau of Industry and Security representative who, per the governing statute, should act impartially when the Operating Committee for Export Policy convenes.

Under current law, OCEP, which is the Operating Committee for Export Policy, may resolve these issues and disputes by a majority vote. However in practice, the chair typically issues a ruling without calling a vote and most often rules in favor of the Department of Commerce, which draws into question their adherence to the directive to be impartial.

It is critical that we deny our adversaries the opportunity to access our American private sector innovation. Our innovation should not be giving a leg up to our enemies in competition.

An increasingly aggressive Chinese Communist Party is posing a growing threat to American values and American interests around the world. In many cases, they are threatening us with our own technology.

For that reason, we must ensure that our national security agencies have a real voice and vote in deciding what technologies can be exported to the People's Republic of China. We want to ensure that the BIS does not produce BS.

Mr. Speaker, I urge support for this bill, and I yield back the balance of my time.

BREAK IN TRANSCRIPT

Source