DEFENSE CONTROLS ON TAP: The Departments of State and Commerce are proposing new rules to tighten export controls and pull back U.S. support for foreign military intelligence security services that give Washington’s adversaries a leg up. The proposed changes, released last week, would introduce new limitations on U.S. individuals and entities providing assistance to foreign military intelligence end-users in more than 40 countries of concern. The measures would also tighten the scope of export licenses for certain defense-related services and impose new restrictions on exporting AI-powered facial recognition technology. The why: The multi-agency push comes as lawmakers on both sides of the aisle urge the Biden administration to further crack down on exports of advanced technology to countries such as China, and after major tech companies modified their high tech exports to avoid penalties under updated standards. Public comments for the changes are due September 27. State’s move: State’s proposed rule, slated for publication today, would revise the definition of defense services and alter the scope of controls under the International Traffic in Arms Regulations, which is designed to facilitate the export of defense and military-related technology. The rule would also expand regulated activities to include actors that provide “assistance, including training or consulting, to foreign persons in the development (including, e.g., design), production (including, e.g., engineering and manufacture), assembly, testing, repair, maintenance, modification, disabling, degradation, destruction, operation, processing, use, or demilitarization of a defense article.” Military focus: One proposal from Commerce’s Bureau of Industry and Security would expand restrictions to cover activities from U.S. persons that assist military end users in accessing foreign-made items. The rule would further tighten restrictions on third-party repairs or maintenance services on items owned by a military end user. According to examples listed in the draft rule, there could be new penalties for assisting defense contractors in a targeted country with the production of a controlled armored vehicle or helping an electronics company develop integrated circuits ordered by the armed services in a covered country. Foreign security end-users: Another proposal from BIS would create an export control for foreign security end-users in various countries of concern. The rule would impose new requirements for items on the Commerce Control List, which helps organize what exports may require a special license. It would, among other changes, also create new restrictions for facial recognition systems, which the agency said has been coupled with artificial technology from adversarial governments to target victims at higher rates. On this front, the measure would create a new so-called CC1 control for "facial recognition systems specially designed for mass-surveillance and crowd scanning."
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