U.S. May Back Down On Tech Export Policy

SHANGHAI — The U.S. government is taking a second look at a controversial plan to tighten export controls on technology shipped to China and is indicating that it may back down a bit to mollify fears that U.S. high-tech gear bound for one of the world's fastest-growing economies will become mired in a tangle of red tape that encourages buyers to shop elsewhere.

The changes, championed by the Bush administration, were scheduled to fall into place as early as April and are intended to cast a wider net over commercial technology products that might make a "material contribution" to the advancement of China's military.

The technology industry has blasted the plan, and deluged the administration with more than 1000 pages of feedback during a six month public comment period that ended in December.

Speaking at Semicon China Friday, a U.S. Department of Commerce official said his agency is revising the proposed rule and believes it can be published within a few months in the U.S. Federal Register. "It was one of the rules that caused the most stir," said Alex Lopes, an official at DoC's Bureau of Industry and Security. "The department is working feverishly to address those comments."

At its core, the rule seeks to expand the category of items that are "dual use" — products that have both commercial and military applications. The proposal unnerves many companies because it sets the bar low enough to expose a much wider variety of products to the export-licensing process, including goods that are readily available from foreign competitors.

It also puts a higher burden of liability on companies to determine whether the item will be used for military purposes.

Lopes said Commerce is reviewing the new items that fall under the proposal in its current form, and is "attempting to make that list more appropriate."

He also said there was a lot of concern about how much due diligence a US vendor would need to do to determine if the end use was for the military. This portion of the proposal will also be revised, he said.