On November 19, 2018, the Bureau of Industry and Security (BIS) published an Advanced Notice of Proposed Rulemaking (Notice) seeking comments from industry on how to define and identify “emerging technologies” that currently are not export controlled but which ought to be because they are “essential to the national security of the United States.” Yes, you read that correctly – BIS seeks industry input as to whether it should subject industry’s emerging technologies to export controls and, by extension, to likely review by the Committee on Foreign Investment in the United States (CFIUS) of any sales or control of such technology to foreign investors. For those who have something to say about this impending regulatory storm, comments on the Notice are due to BIS by December 19, 2018.
In terms of substance and scope, comments on this Notice are likely to make an enduring impact on (i) the foreign availability of certain emerging technologies and the respective controls imposed on their sale and transfer, (ii) the extent of CFIUS review pertaining to any sales or control of such technology to foreign investors, and (iii) the economy as a whole. Given the complexity of the task proposed in the Notice, it would have undoubtedly been wiser – or certainly more accommodating to the soon-to-be governed masses – for BIS to have opted for an extended comment period in which stakeholders are allowed to submit thoughtful, reasoned responses.
BIS does, however, seek comments on treating emerging and foundational technologies as separate types of technology.
These are serious issues that warrant careful attention. Accordingly, we recommend that each of you put down the eggnog (at least temporarily) and give the Notice a careful read. We further recommend that your counsel or industry group assist you in crafting the response.
If you would like additional information on this topic, please contact the author, a member of the Government Contracts & Export Controls Group linked here, or your lawyer at McCarter & English, LLP.