Co-Authored by Sharath Patil
White House Releases Critical Technologies Report
Last month, the White House released a landmark report titled the “National Strategy for Critical and Emerging Technologies.” The report outlines how the United States will promote and protect our competitive edge in fields such as artificial intelligence, energy, quantum information science, communication and networking technologies, semiconductors, military, and space technologies.
Threats to U.S. Critical Technology
A White House press release that announced that report cited serious threats to the U.S. technology advantage:
“As our competitors and adversaries mobilize vast resources in these fields, American dominance in science and technology is more important now than ever, and is vital to our long-term economic and national security. The United States will not turn a blind eye to the tactics of countries like China and Russia, which steal technology, coerce companies into handing over intellectual property, undercut free and fair markets, and surreptitiously divert emerging civilian technologies to build up their militaries.”
Promoting and protecting U.S. critical technology has been an important geopolitical issue for nearly a decade. Stemming the transfer of technology to China has been particularly difficult. In 2015, the Chinese government released the Made in China 2025 Plan (“MIC25”), a national strategic plan to develop the People’s Republic manufacturing sector. MIC25 seeks to turn China into a leading manufacturer in the following key industries: information technology, robotics, green energy, aerospace equipment, ocean engineering / high-tech ships, railway equipment, power equipment, new materials (material science development), medical technology, and agriculture machinery.
White House Pillars of Success
In its recent report, the White House identified two “pillars” to its plan. The report identified the following priority actions under each pillar:
Pillar I: Promote the National Security Innovation Base
- Develop the highest-quality S&T workforce in the world.
- Attract and retain inventors and innovators.
- Leverage private capital and expertise to build and innovate.
- Rapidly field inventions and innovations.
- Reduce burdensome regulations, policies, and bureaucratic processes that inhibit innovation and industry growth.
- Lead the development of worldwide technology norms, standards, and governance models that reflect democratic values and interests.
- Support the development of a robust NSIB, to include academic institutions, laboratories, supporting infrastructure, venture funding, supporting businesses, and industry.
- Increase priority of research and development (“R&D”) in developing United States Government budgets.
- Develop and adopt advanced technology applications within government, and improve the desirability of the government as a customer of the private sector.
- Encourage public-private partnerships.
- Build strong and lasting technology partnerships with like-minded allies and partners, and promote democratic values and principles.
- With the private sector, create positive messaging to increase public acceptance of critical and emergency technologies (“C&ET”).
- Encourage state and local governments to adopt similar actions.
Pillar II: Protect Technology Advantage
- Ensure that competitors do not use illicit means to acquire United States intellectual property, research, development, or technologies.
- Require security design early in the technology development stages, and work with allies and partners to take similar action.
- Protect the integrity of the R&D enterprise by fostering research security in academic institutions, laboratories, and industry, while balancing the valuable contributions of foreign researchers.
- Ensure appropriate aspects of C&ET are adequately controlled under export laws and regulations, as well as multilateral export regimes.
- Engage allies and partners to develop their own processes similar to those executed by the Committee on Foreign Investment in the United States (“CFIUS”).
- Engage with the private sector to benefit from its understanding of C&ET as well as future strategic vulnerabilities related to C&ET.
- Assess worldwide S&T policies, capabilities, and trends, and how they are likely to influence, or undermine, American strategies and programs.
- Ensure secure supply chains, and encourage allies and partners to do the same.
- Message to key stakeholders the importance of protecting technology advantage, and offer practical assistance whenever possible.
Export Control Obligations
Boundless opportunities exist for U.S. businesses when they export their products and services to foreign markets. In fact, over 95% of the world’s consumers are located outside of the United States. However, U.S. exporters have a duty to protect U.S. national security and a legal obligation to adhere to U.S. export control laws. U.S. exporters should develop a robust and comprehensive export compliance plan. According to U.S. Commerce Department’s Bureau of Industry & Security (“BIS”), the elements of an effective export compliance plan are: (1) management commitment, (2) risk assessment, (3) export authorization, (4) recordkeeping, (5) training, (6) audits, (7) handling export violations and taking corrective actions, and (8) building and maintaining your export compliance plan.
Training is a key element of your export compliance plan. Training ensures that all employees understand the export regulations and reinforces internal policies and procedures, demonstrates to federal government agencies that your business is proactive about export compliance, and helps avoid costly penalties and even criminal liability. Diaz Trade Law offers training programs which meet your organization’s needs, including general awareness training, orientation training, and focused training for export personnel. If you would like to learn more about Diaz Trade Law’s export compliance training programs, check out our article.
Even exporter plays an important role in protecting U.S. national security and safeguarding critical technologies. If you have questions on building or improving your export compliance plan or holding a training, reach out to us at email@example.com.