[{"_1":2,"_111":-5,"_112":-5},"loaderData",{"_3":4,"_26":27},"root",{"_5":6,"_17":10,"_18":19,"_20":21,"_22":10,"_23":-5,"_24":-5,"_25":10},"user",{"_7":8,"_9":10,"_11":10,"_12":-5,"_13":-5,"_14":15,"_16":-5},"roles",[],"isAuthenticated",false,"isPremium","planName","subscriptionStatus","featureFlags",{},"insightsBudget","isDevelopmentHost","userPreferences",{},"recaptchaSiteKey","6LcvOJcUAAAAAHsB-gPGfGktcRlKpH7OTIU_dMTD","isImpersonating","impersonation","affiliateStatus","isFreedomPortal","routes/v2/article/layout",{"_28":29,"_30":31},"notFound",true,"relatedArticles",[32,75,87,99],{"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":48,"_49":50,"_51":52,"_53":54,"_55":56,"_57":58,"_59":60,"_61":62,"_63":64,"_65":66,"_67":68,"_69":70,"_71":72,"_73":72,"_74":72},"mediaId",6202998,"mediaKeyId","3784955-75c05f72c81c7cc9d2357d5ad9d6a76e","parentId",3784955,"title","Kessler defends rescission of late-administration AI diffusion rule, committee presses on licenses and IT needs","audioSeconds",2097,"startMs",1906000,"endMs",4003000,"viewUrl","/Search/View?dp=1&key=3784955-75c05f72c81c7cc9d2357d5ad9d6a76e&start=1906&end=4003","thumbnailUrl","https://assets.pipeline.soar.com/3784955-75c05f72c81c7cc9d2357d5ad9d6a76e/thumbnail_1906000.jpg","articleUrl","/articles/6202998/Kessler-defends-rescission-of-late-administration-AI-diffusion-rule-committee-presses-on-licenses-and-IT-needs","mediaUrl","https://secure.pipeline.soar.com/6202998-3ca7465086047015902392de8e3dfc0f/orig.mp4?Expires=1776504033&Signature=d6OfonAyWt-ywkX93lgiTCGMHyayuPXZ7S2OuKY9LCt8t7IhV0mY9vJpw53OBnZ8IPu15GSs4EZsg2EPl~NDYRdMCe7g8th-KZeKbIVZlzG-7TUA7EHZ3SsJY~yubImnOsFaS-Fbl9NAIWgjCJPB6~QuygT1ehIqm5dl-hFIiRfLomMaCsd337usD5p1r1wSy4M5sTlXA0niO3hB67FfVlPhkAjG22NNFt67MnvK4K8uQFOE1rocPdxAu54-9CFK0C~FDbKuLTXUNYRB0ymU7jJzB4rJrdXv5crBgV98RVHI4e8L7oTyygW7V8IXvh5o90hYpEiu0SLcShK45L0RQw__&Key-Pair-Id=KUT5TJCACFTXG","author","U.S. House Committee on Foreign Affairs","date","2025-06-12T14:18:35Z","article","Under Secretary Kessler told the committee he rescinded the Biden administration's AI diffusion rule because it was unworkable and risked disrupting global markets for critical technologies.

\"The diffusion rule was very problematic. The diffusion rule was something that the Biden administration did, in its final hours before leaving office. It was hastily constructed. It established a regime, a worldwide regime for controlling chips that was, bureaucratic, heavy handed,\" Kessler said. He added that the rule \"drew arbitrary distinctions between different countries\" and \"was not ready for prime time,\" which prompted BIS to rescind it before it became effective.

Several members expressed concern about BIS licensing performance. Representative Meeks said the committee had not received Commerce's detailed congressional budget justification and asked when it would be provided; Kessler replied he believed department budget documents had been provided and said he would follow up. Meeks and others also asked about whether license suspensions had followed required interagency and White House processes; Kessler said BIS adheres to interagency procedures for license-related actions and consults the Departments of State, Energy and Defense when required.

The committee also discussed statutory timelines. Members noted the Export Control Reform Act requires BIS to process license applications within 30 days and asked what steps BIS is taking to meet that goal. Kessler said BIS has a dedicated export administration staff that processes applications and that the agency is actively reviewing its licensing processes.

Members pressed BIS's outdated IT infrastructure. One lawmaker said BIS had not fully replaced IT systems since 2008; Kessler acknowledged most BIS systems run on platforms nearly two decades old and said cybersecurity and modernization would be priorities for any appropriated funding.

Why it matters: Licensing decisions and regulatory clarity determine how industry and foreign partners can access sensitive U.S. technologies. The diffusion rule's rescission and questions about IT and licensing timelines indicate the committee will monitor BIS operations as it considers funding requests.

Kessler told lawmakers BIS will follow statutory processes and consult interagency partners when taking licensing actions, will pursue IT modernization, and will provide the committee missing documents as needed.","mediaType","Video","parentTitle","Bureau of Industry and Security FY26 Budget: Export Controls and the AI Arms Race","oneSentenceSummary","Under Secretary Kessler told lawmakers the Biden-era AI diffusion rule was \"hastily constructed\" and unsuitable for implementation; members pressed BIS on license-processing timelines, whether the agency adhered to interagency review on license actions, and on the need to modernize BIS IT and provide the committee a formal budget justification.","taxTitle","Foreign Affairs: House Committee, Standing Committees - House & Senate, Congressional Hearings Compilation, Legislative, Federal","taxId",1826,"location","","headline","shortSummary",{"_33":76,"_35":36,"_37":38,"_39":77,"_41":78,"_43":79,"_45":80,"_47":81,"_49":82,"_51":83,"_53":84,"_55":56,"_57":58,"_59":85,"_61":62,"_63":64,"_65":86,"_67":68,"_69":70,"_71":72,"_73":72,"_74":72},6203003,"Lawmakers press BIS on entity-list actions for Russia; proposal aims to close \"subsidiary\" loophole",114,505000,619000,"/Search/View?dp=1&key=3784955-75c05f72c81c7cc9d2357d5ad9d6a76e&start=505&end=619","https://assets.pipeline.soar.com/3784955-75c05f72c81c7cc9d2357d5ad9d6a76e/thumbnail_505000.jpg","/articles/6203003/Lawmakers-press-BIS-on-entity-list-actions-for-Russia-proposal-aims-to-close-subsidiary-loophole","https://secure.pipeline.soar.com/6203003-d2e3c56db2919af5fe0d577305c957e7/orig.mp4?Expires=1776504033&Signature=RrM9P0VP9ixIbrTH3I~0nQfVcKdg~DIF7CTAiLNcOpZPRCb1F24VHHmQu0MghhaKtacnB7XGllVpMRGyXOG3xxu2kkUe0aKglGeGBRmQFgSvTRDE3tWLo1xed-icC9AOfTvAf3opySEB0Xt8H9TsA5bj4UU8cdy7YQCgGfTCX3f5-iRnlMeIkpmaeBs9R3Ogg87ClpIEJWyLG5tlShHaT9L89ooo1l8zNHxuzoEiA7cTUWh11jvK0t-Q50P9cN6S5y67SMiVsVwJac1CmMWxRJM~uxcVr~CKfzofiFUAQzqjRyH~O4SX~OeEOXvMbjwjJG7aBzM0Qz1eKusrg5VnBg__&Key-Pair-Id=KUT5TJCACFTXG","A number of members raised concerns that BIS has not recently placed additional Russia-linked companies on the entity list in connection with Russia's war in Ukraine.

A member questioned whether BIS had added any companies to the entity list related to Russia since the change in administration. Under Secretary Kessler said BIS has continued enforcement actions addressing Russian parties and that the agency would add entities to the list if a formal interagency process supported that step: \"If we identify Russian parties that we believe should be added to the entity list, we would do that,\" he said.

Separately, Representative Self, the subcommittee chair on Europe, outlined proposed legislation called the Stop Shells Act, which would close a subsidiary loophole by applying entity-list restrictions to subsidiaries that are 50% or more owned by an entity already on the entity list or on the military end-user list. Representative Self said corporate due-diligence firms had identified thousands of Chinese subsidiaries that are at least 50% owned by entities already on the entity list, and he asked whether Kessler agreed closing the loophole would be useful. Kessler said in principle he agreed there was a problem and that he would work with lawmakers on the details.

Kessler reiterated BIS follows an interagency process to add entities to the list and that those processes include coordination with intelligence and other partner agencies.

Why it matters: The entity list is a primary enforcement tool for restricting technology flows to actors that threaten U.S. national security. Lawmakers expressed urgency about moving quickly to add entities when evidence supports it and discussed statutory fixes to limit evasive ownership structures.

Kessler told the committee BIS would act where the interagency process identified entities to add, and he offered to work with lawmakers on possible legislative tools, such as foreign direct product rule adaptations and subsidiary-based measures.","Members asked why BIS has not added Russia-linked companies to the entity list recently and urged more frequent actions; a separate bill, the Stop Shells Act, was described to close a subsidiary ownership loophole used to evade controls.",{"_33":88,"_35":36,"_37":38,"_39":89,"_41":90,"_43":91,"_45":92,"_47":93,"_49":94,"_51":95,"_53":96,"_55":56,"_57":58,"_59":97,"_61":62,"_63":64,"_65":98,"_67":68,"_69":70,"_71":72,"_73":72,"_74":72},6203008,"Kessler: BIS will require rigorous security for any authorized AI chip exports to Gulf partners",3536,727000,4263000,"/Search/View?dp=1&key=3784955-75c05f72c81c7cc9d2357d5ad9d6a76e&start=727&end=4263","https://assets.pipeline.soar.com/3784955-75c05f72c81c7cc9d2357d5ad9d6a76e/thumbnail_727000.jpg","/articles/6203008/Kessler-BIS-will-require-rigorous-security-for-any-authorized-AI-chip-exports-to-Gulf-partners","https://secure.pipeline.soar.com/6203008-bc76f744d33a4ed8507f66a63ea16b52/orig.mp4?Expires=1776504033&Signature=YnNYBh8lSn0VhBKJqBVUf~b4~r~8FkFiITTFKq~4QvjCbC~bMAvuXLwN2zt8l84ZbvbMqNP5cJqv6fM7tHJjyjhu4-6KiAmw4PEV4cO0QmgnBS2PzF5mxJJ52qepFWgx~Kjmlc05P773fz6eyFgaKyItbWzbro2xeG4iyuAagpuvGtMbQVNeqQmtJkQhKgtKtBN8MzUM0kyDwXJ6qvT~YQ30fG4uZDkS9IZidx5~MdoiiBLBGw8ET5RH0lDFT93algR-vESFXp4HBI0pl2oTaOQQmou8S-33HE-JA6hPrAyGDXyykS42FciCHi1Gcxd~RzmyY~Y5QbMi93Gskrayxw__&Key-Pair-Id=KUT5TJCACFTXG","Under Secretary Kessler told the committee that any exports of advanced AI chips require BIS licensing and that BIS evaluates whether chips will be secure when deployed overseas.

\"For any chips to be exported, any of the chips that they're interested in getting, BIS approval would be needed,\" Kessler said, describing his agency's licensing role for overseas deployments.

The committee pressed the witness on recent deals announced by the White House and whether the UAE and Saudi Arabia signed security guarantees to prevent third-party or remote access by adversaries. Representative Kamlager Dove asked directly whether Kessler would \"commit right now that no advanced USAI chips would be exported to The UAE or Saudi Arabia until those governments sign a binding security and monitoring agreement.\" Kessler answered that he would \"ensure that rigorous security requirements are in place, and we would enforce those requirements\" for any license that is required.

Kessler outlined the elements BIS would consider when authorizing exports: trusted operators and cloud providers, physical security at data centers, personnel vetting and \"know your customer\" controls to prevent diversion through shell companies. He said security requirements would be enforced as part of license conditions.

Lawmakers repeatedly raised the idea of embedding technology such as location tracking on AI chips to detect diversion. Kessler agreed those were areas of discussion but did not commit to specific technical mandates; he said BIS would weigh security measures when evaluating license requests.

Kessler also addressed whether any export controls had been suspended as a result of recent diplomatic deals: \"No. No no export controls have been suspended at all,\" he said, adding that existing export controls remain in force during negotiations and after announced deals.

Why it matters: Several members said Gulf deals could open markets for U.S. AI infrastructure while posing diversion risks. The exchange shows the committee's attention to license conditions as a tool to balance economic and security objectives, and highlights the kinds of security terms BIS would expect to see before authorizing exports.

Kessler said BIS will continue to require licenses for covered chips and to condition approvals on security requirements; he said the agency would work with committee members on technical and policy details.","Witnesses and lawmakers debated whether AI chip exports to Gulf countries should be conditioned on binding security agreements. Under Secretary Kessler said BIS approval would be required and that licenses would include \"rigorous security requirements,\" but declined to pre-commit to blocking exports until governments sign specified agreements.",{"_33":100,"_35":36,"_37":38,"_39":101,"_41":102,"_43":103,"_45":104,"_47":105,"_49":106,"_51":107,"_53":108,"_55":56,"_57":58,"_59":109,"_61":62,"_63":64,"_65":110,"_67":68,"_69":70,"_71":72,"_73":72,"_74":72},6203012,"BIS asks Congress for major enforcement expansion to bolster export controls",2479,0,2479000,"/Search/View?dp=1&key=3784955-75c05f72c81c7cc9d2357d5ad9d6a76e&start=0&end=2479","https://assets.pipeline.soar.com/3784955-75c05f72c81c7cc9d2357d5ad9d6a76e/thumbnail_0.jpg","/articles/6203012/BIS-asks-Congress-for-major-enforcement-expansion-to-bolster-export-controls","https://secure.pipeline.soar.com/6203012-1f3eb008496a5fb59d0840312dcd9293/orig.mp4?Expires=1776504033&Signature=IP3R5GZyTmycM3ycd-mC~81J38KGOoWy-Iv5qzkunDVLLnAaxJTje7JonhQIreTNvJRBWi1WZBR6SyWUsctF6NsD8NUX1Zki84AKGhsfqu8-wsqRXo9U8KTVgwXzxWjifeptzsvvvaXSMAxkqFQRmD8VC5jztX8HqsZwlPcYRLALquR3fCjN~66AoU5ZLbOifl1vNjt332J9sC~Ftj1ytSo4x6-68j0f-AHQ5kYYz3d8QI9F6JuEPuwqlT3~6fwuvHUrrH-bksj00ph~wuZRvitAc1ZgooBkf1Dg3hPDCYAEXKpUhQMBNcW9aSYh6Vbyzm8Z6IBKWb29EBgTViTwRw__&Key-Pair-Id=KUT5TJCACFTXG","Under Secretary Kessler told the House Foreign Affairs subcommittee that the Commerce Department's Bureau of Industry and Security (BIS) is requesting a large budget increase to expand enforcement capacity, hire additional specialized staff and equip investigators.

\"It's time for BIS to have the resources that it needs to do its job and keep America safe,\" Under Secretary Kessler said, outlining hiring and overseas staffing goals.

Kessler described concrete personnel targets tied to the requested funding. He said the bureau would be able to hire \"almost 200 export enforcement special agents stationed across the United States\" and more than double the number of overseas export control officers (ECOs) from 12 to 30. He told lawmakers the budget would also support specialized engineers and technical experts who assist enforcement teams in assessing whether licenses were required for exports that have already occurred.

A number of members pressed Kessler for detail on how the funds would be spent and for performance metrics. Representative Johnson asked for the Commerce Department's formal congressional budget justification and questioned what specific outcomes BIS would commit to achieve with the requested increase. Kessler said the bulk of the increase would fund personnel and that some funds would go to equipment for enforcement officers, naming items such as service vehicles, bulletproof vests and firearms.

Members also flagged workforce strain and turnover. Kessler acknowledged personnel losses but said the agency still has the capacity to operate and that additional resources would let BIS detect and prevent more wrongdoing. He said BIS currently handles thousands of license applications per month and that the agency's enforcement apparatus is small relative to the scope of global trade it must oversee.

Representative Meeks and Representative Johnson separately told Kessler that the committee had not yet received the Commerce Department's detailed budget justification; Kessler said he would follow up if documents remained outstanding. Meeks said the lack of a formal justification made it difficult to vet BIS's request.

Why it matters: BIS enforcement underpins U.S. controls on semiconductors, AI-related products and other technologies that lawmakers identify as critical to national security. Lawmakers on both sides of the aisle asked for more detail about how the additional funds would be used and for time lines or metrics tied to the spending.

Kessler urged congressional support for increased resources and emphasized international coordination as essential for effective controls, saying that multilateral alignment prevents foreign backfilling of supply chains that might otherwise undercut U.S. export restrictions.

Looking ahead, Kessler agreed to work with the committee on specifics about hiring authorities and enforcement priorities if Congress provides the requested budget increases.","Under Secretary Kessler asked Congress for a significant increase to the Bureau of Industry and Security's enforcement budget to add agents, double overseas export control officers and buy enforcement equipment, saying the moves are needed to catch more cases of export diversion and protect sensitive U.S. technology.","actionData","errors"]

Article not found

Kessler defends rescission of late-administration AI diffusion rule, committee presses on licenses and IT needs

Lawmakers press BIS on entity-list actions for Russia; proposal aims to close "subsidiary" loophole

Kessler: BIS will require rigorous security for any authorized AI chip exports to Gulf partners

BIS asks Congress for major enforcement expansion to bolster export controls