Tuesday 20 March 2018

IBM and GE Respond on Tech Export Bill

Rep. Pittenger’s bill would drastically expand the mission of Cfius, an interagency committee staffed by fewer than a dozen people.

Regarding Rep. Robert Pittenger’s “How China Pushes the Limits on Military Technology Transfer” (op-ed, March 14): Few Americans would argue against measures to make this country more secure, and most would agree that protecting national security requires the proper tools. Still, many more would agree that being factual when discussing this topic is absolutely critical.

Legislation recently introduced in Congress and advocated in these pages by Rep. Robert Pittenger would make some needed improvements to the Committee on Foreign Investment in the U.S. (Cfius). For example, the measure would expand the ability of the government to block the purchase of buildings or other real estate near military installations.

But Mr. Pittenger’s bill—the Foreign Investment Risk Review Modernization Act—goes much, much farther. It would drastically expand the mission of Cfius, an interagency committee staffed by fewer than a dozen people at the Treasury Department, bringing under government review countless international sales and licensing transactions by U.S. companies.

The new remit of Cfius would include such things as standard computer service and support contracts, technology manuals needed to operate machinery purchased by foreign customers and even the licensing of trademarks. Technologies that never were deemed sensitive by the Defense Department or that were long ago removed from control by the U.S. and its allies would be subject to new and opaque regulation by Cfius.

More concerning is that Mr. Pittenger’s bill would do all of this unilaterally—without any effort at cooperation with our allies. The U.S. does not have a monopoly on innovative technologies. Congress can impose all the restrictions it wants on U.S. businesses. But, if America does not work with allies to enact similar controls, we will fail to protect both national security and our economic competitiveness.

In making his case to expand Cfius, Rep. Pittenger has misrepresented the facts. He cites examples of technology sold overseas by IBM and other companies that the U.S. government itself long ago ruled were nonsensitive and able to be freely sold around the world without a government license. In fact, everything IBM has done globally complies with U.S. and foreign export-control laws. For instance, sharing widely published, open-source software, or technology to assemble computer servers that are years behind state of the art, isn’t threatening and therefore not legally controlled for export. But assisting with China’s high-performance computing project is rightly prohibited by U.S. law, and the assertion that IBM has done so is flatly untrue.

Instead of putting thousands of nonsensitive transactions under review by a small committee that has neither the staff nor the experience to handle them, the better approach would be to update the export-control system we already have. A bipartisan bill introduced by Reps. Ed Royce and Eliot Engel, leaders of the House Foreign Affairs Committee, would modernize export controls to deal with emerging challenges.

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Article Credit: WSJ

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source http://news.statii.co.uk/ibm-and-ge-respond-on-tech-export-bill/

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