[co-author: Hadley Sayers6]
Against the backdrop of increasing international competition in the artificial intelligence (AI) space, the Enhancing National Frameworks for Overseas Critical Exports Act (the ENFORCE Act) was recently introduced in the U.S. House of Representatives.1 The ENFORCE Act is a bipartisan bill that would clarify the Department of Commerce’s Bureau of Industry and Security (BIS) authority to restrict exports of AI systems, and related activities of U.S. persons, that have national security implications.2 While this bill does not specifically target any country, the proposed export controls mirror BIS’ 2022 novel restrictions on other emerging technologies directed at China.3
Background
As export controls continue to be enhanced in the face of ongoing economic and military conflicts around the world, the ENFORCE Act is merely the latest bipartisan bill intended to limit China’s access to sensitive American technology. This bill expands on the 2022 export controls that BIS implemented on advanced semiconductors, the equipment needed to manufacture them, and the activities of U.S. persons involving shipping, transmitting, or transferring to or within China certain advanced integrated circuits (ICs).4
The stated purpose of these export controls is protecting national security by limiting the efforts of foreign adversaries — particularly China — in advancing military capabilities through the use of AI. The U.S. Government’s collective assessment that AI poses a significant national security challenge is reflected in the bipartisan legislative and executive actions of recent years with the ENFORCE Act being the latest example.
By amending the 2018 Export Control Reform Act (ECRA), this bill would close a potential loophole in the current export controls regime.5 As discussed, BIS already restricts exports of hardware and certain activities of U.S. persons when such exports or activities raise national security concerns. However, without the ENFORCE Act, BIS arguably lacks the authority to regulate AI systems. If enacted into law, this bill would codify BIS’ authority to impose licensing requirements on exports of certain AI systems and related activities of U.S. persons.
Specifically, BIS would be able to impose on U.S. persons — regardless of their location — license requirements for certain activities related to “covered AI systems.” Such activities include (1) exports, reexports, or in-country transfers (even if not typically controlled under the current regulations); and (2) other activities that may support the design, development, production, use, operation, installation, maintenance, repair, overhaul, or refurbishing of covered AI systems. These comprehensive restrictions would enact stringent oversight of covered AI systems and related activities that could potentially impact national security.
Covered AI Systems
The scope of AI systems included in this definition would be developed through a structured two-step process. Initially, an interim definition would take effect when this bill is enacted. This interim definition would include AI systems that have the potential to lower barriers for developing chemical, biological, radiological, and nuclear weapons, enable offensive cyber operations, or evade human oversight. Other AI systems expected to exhibit similar capabilities due to technical similarities or equivalent performance would also be included.
Subsequently, BIS, in consultation with the Departments of State, Defense, and Energy, would establish a finalized a regulatory definition. This final definition would be developed by considering both technical and non-technical factors that protect national security and would be periodically updated as deemed necessary to protect national security.
Notably, this bill is intended to empower, but not require, BIS to implement these export controls. Accordingly, the specific scope of any future license requirements would be left to the discretion of BIS. However, if BIS’ 2022 export controls provide any indication as to its exercise of discretion related to Chinese export controls, BIS would likely avail itself of the additional regulatory authorities enacted by the ENFORCE Act.
Potential Considerations
Similar to previous export controls on AI-related technology, implementing these types of restrictions would likely disrupt the operations of technology companies with operations related to China. The precedent established by the 2022 export controls on the activities of U.S. persons should serve as notice to individuals and companies involved in international trade, that wide-ranging export controls on AI systems are likely on the horizon.
With this in mind, U.S. persons involved in AI operations, wherever located, should closely monitor the progress of this bill and any similar regulatory action by the U.S. Government and its allies. Even completely domestic transactions have the potential impact of reaching into China (or other sanctioned countries). Companies should also begin considering whether existing AI models, including large language models (LLMs), have capabilities that could subject them to national-security-related regulations. If LLMs have these sorts of capabilities, companies may want to consider making modifications, or determining what steps can be taken to ensure that their LLMs are not misused by U.S. adversaries.
The concerns regarding AI are similar to when encrypted technologies were of concern to the U.S. and other governments. As such, it is important to understand how the governmental agencies classify technology that is supported by AI. Furthermore, companies should consider updating policies, procedures, and training requirements to include the updated sanctions related to AI technologies.
Footnotes
- See H.R. 8315, 118th Cong. (2023). Available at https://www.congress.gov/bill/118th-congress/house-bill/8315/text. [Back]
- U.S. persons include U.S. citizens, legal permanent resident aliens, asylees, refugees, and entities organized under the laws of the U.S. including foreign branches. [Back]
- For purposes of export controls, China includes the Hong Kong Special Administrative region after the United States Government revoked its special status under U.S. law in 2020. [Back]
- See 87 Fed. Reg. 62186 (Oct. 13, 2022) (to be codified at 15 C.F.R. Parts 734 – 774). [Back]
- See 50 U.S.C. §§ 4801-4852. [Back]
- Hadley Sayers is a law student and not admitted to practice law.
