US penalties for technology sales to China have soared this year, Commerce Department official says
- Jeremy Pelter of the Bureau of Industry and Security tells congressional advisory panel China deals have led to nearly US$6 million in penalties and fines
- US is also developing common export controls with allied nations to further restrict Chinese access to sensitive technologies, he says
Punitive actions taken by the US for the sale of sensitive technology to China have soared this year as agencies policing such transactions have expanded their reach, a Commerce Department official said on Wednesday, in a hearing where the department was pushed to identify more technologies subject to export controls.
Investigations by the department’s Bureau of Industry and Security (BIS) into China-related transactions have resulted in 226 months of prison time, US$1,858,000 in criminal fines, and US$4,048,000 in civil penalties so far this year, the bureau’s acting undersecretary Jeremy Pelter said in a hearing before a congressional advisory panel.
That compares with 80 months of prison time and US$60,000 in criminal fines doled out in 2020, Pelter told the US-China Economic and Security Review Commission (USCC).
The penalties include a US$469,060 fine that BIS levied last month against Dynatex International of Santa Rosa, California, for sales to two Chinese companies on the Commerce Department’s “entity list” of companies deemed to be national security threats or human rights violators.
BIS is leveraging “unique relationships to … identify attempts to misappropriate US intellectual property to prevent its export and identify enforcement leads to disrupt and deter these illicit activities”, Pelter said. “BIS will continue to work with our inter-agency partners, Congress, the exporting community, and counterparts in allied countries to further our national security and foreign policy objectives.”