Senate's Commerce Funding Clears Committee

The Senate Appropriations Committee completed the markup of the "Commerce, Justice, Science, and Related Agencies Appropriations Act  S.4795  providing $11.54 billion for the Department of Commerce.

This includes $206 million for the Bureau of Industry and Security [BIS]. The recommendation is $15 million above the fiscal year 2024 enacted level and $17.4 million below the budget request.

Below some of the committee asks that accompanied the proposed funding for BIS

Revision of Firearms License Requirements.—

Committee directs BIS to provide a report detailing the national security and economic impacts of the interim final rule (89 FR 34680).

Export Controls and Huawei Technologies Co., Ltd..—

Noting that BIS has approved multiple export licenses of low-level semiconductor technology for Huawei since its addition to the Entity List the Committee directs the Secretary of Commerce, to certify that BIS has reviewed all licenses issued to entities to export, reexport, or transfer (in-country) to Huawei or any of its subsidiaries listed on the Entity List and, through the interagency license review process, rescind licenses, as appropriate.

"Review of Entity List Application to Subsidiaries and Affiliates.-

T Committee directs BIS to review all parents, subsidiaries, affiliates, or successor entities of Entity-listed companies to determine whether they meet regulatory standards for addition to BIS' Entity List within 180 days of the enactment of this bill and for every new entity added to the Entity List

" Report on Countries of Diversion Concern.—

The Committee asks for a report containing a list of countries that: 1) receive U.S. exports, and 2) have a history or high risk of diversion of sensitive technologies to the PRC or Russia.

Transparency Over Sensitive Exports to China.—

The Committee directs BIS to submit a report within 180 days of the enactment of this act and annually thereafter on the number of export licenses that are approved during the preceding year for exports to PRC entities currently on the BIS entity list.

Restrictions on Advanced GPUs to Countries that Host PRC Military Bases.—

Concerned by the United Arab Emirates’ [UAE] growing ties to the PRC in artificial intelligence, the Committee directs BIS to reevaluate its export licensing review posture for Export Control Classification Numbers 3A090 and 4A090—high-performance integrated circuits—to any person based in the UAE with the goal of preventing the reexport of or access to such GPUs by persons located or headquartered in the PRC.

"Criticial, Emerging, Foundational" Technologies definitions

The Committee calls for a report on the feasibility of adding all technologies identified by the Office of National Science and Technology Council in February 2024 as ‘‘critical and emerging technologies’’ to the list of emerging and foundational technologies controlled pursuant to section 1758 of the Export Control Reform Act of 2018.

Investigation on PRC-based Light Detection and Ranging [LIDAR] Companies.—

Thehe Committee is concerned about the potential national security threat posed by PRC-based LIDAR companies. The Committee directs BIS to investigate PRC-based LIDAR companies to evaluate whether they meet the requirements to be added to the Entity List.

Report on BIS Export Control Execution.—

The Committee called for a report on instances of evasion of export controls and gaps in the export control regime that have allowed controlled U.S. technology, especially controlled semiconductor technology, to flow to entities in the PRC without a license.

Included is an ask for a list of recommendations that would increase BIS’ ability to:

• process export control licenses;
• enforce restrictions on already covered entities;
• identify and respond to any evasion of export controls; i
• integrate data analytics, artificial intelligence, and other technologies as needed; and
• increase coordination for export control enforcement across the Federal Government.

On-chip Mechanisms for Export Control

Calls for a study of the feasibility of on- chip mechanisms for export-controlled semiconductors that are used in the development of advanced artificial intelligence and commitments to update export controls to incentivize firms to develop secure on-chip mechanisms,

Restrictions on Electric Vehicles [EVs] from the PRC.—

The committee  expressed concern of  reports that PRC-based electric vehicle manufacturers may be seeking to enter the U.S. market by opening manufacturing plants in Mexico, asking for a briefing by the Department on the topic.

"Engagement on Business and Human Rights. -

Calls for Commerce to work with State and Labor to increase American companies’ awareness of human rights risks, particularly in high-risk contexts, and their ability to mitigate them.

Firearms Provisions

SEC. 534. (a) Notwithstanding any other provision of law or treaty, none of the funds appropriated or otherwise made available under this Act or any other Act may be expended or obligated by a department, agency, or instrumentality of the United States to pay administrative expenses or to compensate an officer or employee of the United States in connection with requiring an export license for the export to Canada of components, parts, accessories or attachments for firearms listed in Category I, section 121.1 of title 22, Code of Federal Regulations (International Trafficking in Arms Regulations (ITAR), part 121, as it existed on April 1, 2005) with a total value not exceeding $500 wholesale in any transaction,  

(a) provided that the conditions of subsection (b) of this section are met by the exporting party for such articles.

(b) The foregoing exemption from obtaining an export license—

• does not exempt an exporter from filing any Shipper’s Export Declaration or notification letter required by law, or from being otherwise eligible under the laws of the United States to possess, ship, transport, or export the articles enumerated in sub•S 4795 RS 25 section (a); and
• does not permit the export without a license of— (A) fully automatic firearms and components and parts for such firearms, other than for end use by the Federal Government, or a Provincial or Municipal Government of Canada; (B) barrels, cylinders, receivers (frames) or complete breech mechanisms for any firearm listed in Category I, other than for end use by the Federal Government, or a Provincial or Municipal Government of Canada; or (C) articles for export from Canada to another foreign destination.

(c) In accordance with this section, the District Directors of Customs and postmasters shall permit the permanent or temporary export without a license of any unclassified articles specified in subsection (a) to Canada for end use in Canada or return to the United States, or temporary import of Canadian-origin items from Canada for end use in the United States or return to Canada for a Canadian citizen.

(d) The President may require export licenses under this section on a temporary basis if the President determines, upon publication first in the Federal Register, that the Government of Canada has implemented or maintained inadequate import controls for the articles specified in subsection (a), such that a significant diversion of such articles has and continues to take place for use in international terrorism or in the escalation of a conflict in another nation. The President shall terminate the requirements of a license when reasons for the temporary requirements have ceased.

SEC. 535. Notwithstanding any other provision of law, no department, agency, or instrumentality of the United States receiving appropriated funds under this Act or any other Act shall obligate or expend in any way such funds to pay administrative expenses or the compensation of any officer or employee of the United States to deny any application submitted pursuant to 22 U.S.C. 2778(b)(1)(B) and qualified pursuant to 27 CFR section 478.112 or .113, for a permit to import United States origin ‘‘curios or relics’’ firearms, parts, or ammunition.

SEC. 536. None of the funds made available by this Act may be used to pay the salaries or expenses of personnel to deny, or fail to act on, an application for the importation of any model of shotgun if— (1) all other requirements of law with respect to the proposed importation are met; and (2) no application for the importation of such model of shotgun, in the same configuration, had 1 135 been denied by the Attorney General prior to January 1, 2011, on the basis that the shotgun was not particularly suitable for or readily adaptable to sporting purposes.

 SEC. 537. None of the funds made available by this Act may be obligated or expended to implement the Arms Trade Treaty until the Senate approves a resolution of ratification for the Treaty.