Testifying before the House Foreign Affairs Subcommittee on South and Central Asia, Under Secretary of Commerce for Industry and Security Jeffrey Kessler faced pointed questions over the Bureau of Industry and Security’s (BIS) FY2026 budget request, enforcement capacity, licensing delays, and export control rulemaking.
He declined to shed light on the export control concessions he and fellow negotiators made in talks with Chinese officials in London earlier in the week.
In response to a question from Full Committee Ranking Member Gregory Meeks (D-NY) about the use of export controls as bargaining chips, Kessler stated "When we impose controls, it’s based on national security and foreign policy interests, not trade leverage."
Kessler appeared without the Commerce Department’s Congressional Budget Justification (CJ)— the document that provides Congress with detailed program-level spending plans—prompting criticism from both Republican and Democratic members.
Subcommittee Ranking Member Sydney Kamlager-Dove (D-CA) questioned the absence, noting that BIS was seeking a 50% increase in its top-line budget without providing Congress the requisite justification. My understanding is that Commerce has provided them. If something is missing, I will follow up,” Kessler responded.
Kessler explained he intended to use the funds to hire nearly 200 additional Export Enforcement Special Agents and double the number of Export Control Officers (ECO) stationed overseas – from 12 to 30.
Kessler defended the Trump administration’s decision to rescind the outgoing Biden administration’s AI Diffusion Rule, calling the measure “very Byzantine” and “not ready for prime time.”
“It was bureaucratic, heavy-handed… difficult to understand, much more difficult to comply with, and divorced from commercial reality,” Kessler testified, describing the rule’s tiered computing thresholds and country caps as impractical and diplomatically alienating.
The rule, which would have established global thresholds for controlling the export of high-performance AI systems, was scrapped before taking effect.
When asked whether the Gulf states—specifically the UAE and Saudi Arabia—had agreed to security restrictions to protect U.S.-origin controlled technology in their planned AI data centers, Under Secretary Kessler responded that the governments involved were “very much aware” of U.S. security requirements, and that such conditions had been discussed. He stated:
“We’ve made no secret of the fact that for any chips they are interested in getting, BIS approval would be needed… What we look at when we authorize—or not—exports like that is whether the chips are going to be secure when they’re deployed overseas.”
Pressed further, Kessler did not confirm the existence of any binding security agreements but affirmed BIS’s intent to enforce stringent safeguards:
“What I would commit to is ensuring that for any AI chip exports that require a license, we would ensure that rigorous security requirements are in place, and we would enforce those requirements.”
Kessler also rejected what members described as a “shadow policy” of deferring the identification of emerging and foundational technologies to multilateral bodies such as the Wassenaar Arrangement. Under the Export Control Reform Act (ECRA), BIS is required to independently identify and control such technologies.
“There’s no requirement to perform some kind of multilateral box-checking exercise before recognizing and controlling foundational technologies,” Kessler said. “If that shadow policy exists, it’s not one that I will honor.”
Several members raised concerns over increased delays in export license approvals, especially for applications involving sensitive technologies destined for allied countries.
Ranking Member Kamlager-Dove directly asked: “Have you ordered a pause or delay in review of license applications since you assumed your role at Commerce?”
Kessler replied that he had been “carefully reviewing the licensing process,” noting that in the past, BIS had “rubber-stamped” certain licenses, particularly those involving China. While not confirming a formal pause, he acknowledged the review had introduced more scrutiny.
When asked whether average approval times had increased, Kessler admitted: “I don’t know, but I would guess that there has been [an increase], because I’m no longer rubber stamping applications.”
He indicated that BIS is actively considering use of the Foreign Direct Product Rule (FDPR) and other tools to address backfill risks, especially involving Chinese access to AI chips and semiconductor equipment through third countries.
“These are national security priorities,” he said, “and the United States should consider all options… including but not limited to those in the export controls toolkit.”
Kessler’s appearance marked the first from a senior Commerce Department official in this Congress, and the subcommittee made clear it expects further transparency, particularly in forthcoming actions on semiconductors and AI.
Rep. Jefferson Shreve (R-IN) announced plans to introduce legislation to expand BIS hiring authorities for technical experts, while others, including Rep. Julie Johnson (D-TX), expressed concern that cuts to federal R&D and restrictive immigration policies are undermining the U.S. technology workforce BIS seeks to protect.
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