Interagency Consensus Should Be Required to Approve Export Licenses, Lawmaker Says
The House Foreign Affairs Committee could soon consider legislation that would harmonize various U.S. sanctions lists in a bid to help agencies better reach consensus when reviewing export license applications. Rep. Michael Waltz, R-Fla., said the Commerce Department has an outsized vote in adjudicating applications of sensitive exports and should be required to more carefully weigh input from other agencies, including the Defense and State departments.
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Waltz, speaking during a House Foreign Affairs subcommittee hearing last week, said he’s concerned with the “current construct” of the Operating Committee, an interagency body that serves as the first level to resolve differences between agencies over a licensing decision. He said from 2017 to 2021 the committee -- which is chaired by the Bureau of Industry and Security and includes representatives from the Defense, Energy and State departments -- saw a 60% increase in licensing decisions made by the BIS chair “without the consensus of the other agencies.” About 10% of those decisions were made “with the support of only one of the other agencies,” Waltz said.
He said the committee should be required to reach a consensus on licensing decisions. “I think we should go to default consensus, particularly if the Defense Department has serious national security concerns,” Waltz said. Although he didn’t propose rule changes to the committee, Waltz said better harmonization of various entity lists maintained by the Commerce and DOD could allow the agencies to agree on more licensing decisions.
“The Defense Department can say, ‘we have all of these concerns on these items or even these companies,’ and then Commerce can say, ‘thank you very much, but we're going to do it anyway,” he said. “Commerce is overweighted in its power when it comes to application determinations.” He said he plans to soon introduce legislation that would help in “harmonizing these lists and hopefully, really getting our arms around this problem.”
National security consultant Stephen Coonen, a former Pentagon official who has said other agencies need more power to influence the outcomes of license reviews (see 2305100033), said he “absolutely” thinks harmonization of U.S. sanctions lists would help. But he also said the rules surrounding licensing decisions “need to change” to explicitly give DOD and the State Department more "sway" over adjudications, adding that DOD should potentially have veto power.
Nazak Nikakhtar, former acting undersecretary at BIS and now a trade lawyer with Wiley, said every agency should have an equal vote when assessing a license application, with the National Security Council as the tiebreaker. “It's ridiculous that Commerce has an outsized vote,” Nikakhtar said. “These other agencies have the expertise.” Under the current format, disagreements within the Operating Committee can be escalated to the Advisory Committee for Export Policy, a body composed of presidential appointees from the agencies where majority vote rules.
Rep. Brian Mast, R-Fla., chair of the House Foreign Affairs Oversight and Accountability Subcommittee, said he will “look forward to marking up” Waltz’s legislation. Mast also asked whether Congress should consider limiting BIS’ fundamental research exemption, which excludes certain research intended for publication from export licensing requirements.
Nikakhtar said universities should be required to obtain a license for a broader range of activities related to fundamental research. “Why not take every single thing on the Commerce Control List right now, and just tell the universities for foreign countries of concern -- we don't need to do it broadly -- for foreign countries of concern, 'no more fundamental research exception,'” she said. “'Even if you intend to publish, you need to get a license from BIS before you do that.'"