Very interesting post, thanks for taking the time to write it up. It sounds like the BIS is moving in the right direction on regulating some sensitive biotech stuff. While it seems like there are some obvious things to add to this list (e.g. dangerous pathogens), it also seems like a lot of the dual-use stuff would be non-obvious to regulate this way given that many of the technologies that could be used to engineer a pathogen also have legitimate scientific and industrial applications.
I’ve included some of my shallow notes on this topic from investigating the Chinese bioeconomy.
Challenges with dual-use
For example, one area that has received particular scrutiny regarding import-export controls is w.r.t. surveillance technology used in China. In a 2018 letter to Secretary of Commerce Wilbur Ross inquiring about the sale of surveillance Technology to Chinese police, Senator Marco Rubio (R-FL) and U.S. Representative Chris Smith (R-NJ) wrote:
Recently, Human Rights Watch and other organizations have identified Thermo-Fisher Scientific, a Massachusetts based company, as selling DNA sequencers with advanced microprocessors under the Applied Biosystems (ABI) Genetic Analyzer brand to the Chinese Ministry of Public Security and its Public Security bureaus across China.
The letter goes on to request answers to the following questions:
1) Given that most crime control and detection and surveillance equipment, software and technology are controlled under the Export Administration Regulations, what factors are being used to determine the suitability of an export to an agent of state security? How did Thermo-Fisher surmount a presumption of denial to sell their product to the Chinese government?
2) What other product licenses have been sought under Export Administration Regulations sections 742.7, 742.13, 744.17(c), or other sections, to sell to agencies of China’s state security?
3) In light of recent reports, how are you—in coordination with the Department of State—reviewing the export of items being used by Chinese military and police end-users for surveillance, detection, and censorship, to determine whether more scrutiny is needed over the proliferation of “dual-use” information, software, and communication technologies? Are new legislation or new authorities needed to revisit/revise export control regulations so they are consistent with the rapid evolution of technology? Is software or technology which could be used for the purpose of domestic repression, subject to export controls with respect to Chinese end-users of concern?
4) In addition to possible export controls, is there any discussion currently underway to, at the very least, restrict the end-users of such technologies, in this case Xinjiang Public Security and related entities?
In a response letter, Secretary Wilbur stated that the rules did not apply to Thermo Fischer because
The items [gene sequencers] are low-technology products that are available from worldwide sources, including indigenous Chinese sources, and have numerous legitimate end-uses,”
including in education, medical research, and forensics, according to Mr. Ross’s letter.
This, I suspect, is the biggest challenge with an import-export. Where do you set the bar for technologies or products to join the export control list when it has applications in science or industry. Another externality here is that US biotech firms that sell products and services in China are likely to be hurt by too far-reaching an export control list (For more info on these considerations I recommend the report Two Worlds, Two Bioeconomies: The Impacts of Decoupling US–China Trade and Technology Transfer).
Foreign investment
With regards to foreign investment, the U.S. has been pretty active in response to Chinese investment in biotech. The Committee on Foreign Investment in the United States (CFIUS) which sits under the Department of Treasury is the body in charge of reviewing transactions involving foreign investment in the United States that could involve national security concerns. The Foreign Investment Risk Review Modernization Act of 2018 (FIRMA) expanded CFIUS’s purview to include subjecting even non-controlling foreign investments in companies with certain critical technologies or involved in sensitive data collection of US citizens. Under Firma, Chinese investment in U.S. biotech dropped sharply.
The article presents two biotech case studies where CFIUS has intervened:
After receiving $5 million in funding from the Department of Defense, San Francisco start-up Twist Bioscience, makers of synthetic DNA, decided to expand manufacturing through a Chinese subsidiary. This prompted an amendment to Congress’s annual defense policy bill to ensure grant recipients of the Pentagon’s Defense Advanced Research Projects Agency are prohibited from partnering with entities subject to foreign company or government control. The main concern cited was the threat of the Chinese government stealing intellectual property and trade secrets from American companies (O’Keefe, 2019).
In 2017, PatientsLikeMe, Cambridge-based online service that helps patients find people with similar health conditions, sold a majority stake to China’s iCarbonX. The goal was to combine the Chinese firm’s artificial intelligence technology with PatientsLikeMe’s customers and data sets. Currently, around 700,000 people use the website, which has generated tens of millions of data points about disease. CFIUS is now forcing a divestiture because the company collects potentially sensitive data on users who set up profiles which poses a danger to US national security. With this decision, PatientsLikeMe not only loses its principal financier, but also a critical technology partner (Farr, 2019).
Under its authority, CFIUS could and probably does try to prevent foreign actors from gaining bioweapon-enabling by means of technology transfer through foreign investment, but the same challenges around dual-use research are present.
Overall thoughts
The U.S. government’s focus on regulating foreign investment and doing export control stuff seems more broadly motivated by concerns about economic competitiveness, IP theft, and national security priorities (some more reasonable than others) that currently don’t cleanly reflect GCBR reduction priorities.
Any kind of unilateral approach on import-export regulations or even foreign investment is challenging since countries can find other vendors or companies of advanced biotech in Europe and China. That being said, the U.S. has the largest and most advanced bioeconomy so limiting the export of sensitive tech and products could certainly still limit some critical supplies, although I’m unsure of what.
One approach might be to limit more dual-use biotech under export controls at a baseline, but increase the capacity at BIS to oversee exceptions to the export control list. This way sales can be verified against military or other suspicious end users.
Thanks so much for your detailed comment, and sorry for not seeing it earlier!
I’m a bit unclear what’s going on in the Thermo-Fischer example: The second question from the initial letter makes it sound like TF had been granted a license to export under the EAR, but I don’t see a claim that the technology was covered by the Commerce Control List, and the response from Ross seems to suggest otherwise (from what I can tell, I’m behind the WSJ paywall).
In any event, I think this is just the same issue that comes up generally with regulation of dual-use technologies. There’s a question of whether technology with dual-use potential can be restricted from export under the CCL, and I think the answer to that is clearly yes (see, e.g., the restriction on software for DNA synthesizers). Then there’s the separate question of whether it should be restricted, and that’s going to require a context-dependent analysis of each case, with consideration of the balance of offensive and defensive uses of the tech. This is often a difficult question, but I think the analysis from a GCBR/advocacy perspective is going to be the same as it is for, say, differential development of technologies.
The concern about multilateral controls is a good one in general, though I think unilateral controls still pack a lot of punch when it comes to, e.g., publication of research by researchers at American universities.
Very interesting post, thanks for taking the time to write it up. It sounds like the BIS is moving in the right direction on regulating some sensitive biotech stuff. While it seems like there are some obvious things to add to this list (e.g. dangerous pathogens), it also seems like a lot of the dual-use stuff would be non-obvious to regulate this way given that many of the technologies that could be used to engineer a pathogen also have legitimate scientific and industrial applications.
I’ve included some of my shallow notes on this topic from investigating the Chinese bioeconomy.
Challenges with dual-use
For example, one area that has received particular scrutiny regarding import-export controls is w.r.t. surveillance technology used in China. In a 2018 letter to Secretary of Commerce Wilbur Ross inquiring about the sale of surveillance Technology to Chinese police, Senator Marco Rubio (R-FL) and U.S. Representative Chris Smith (R-NJ) wrote:
The letter goes on to request answers to the following questions:
In a response letter, Secretary Wilbur stated that the rules did not apply to Thermo Fischer because
including in education, medical research, and forensics, according to Mr. Ross’s letter.
This, I suspect, is the biggest challenge with an import-export. Where do you set the bar for technologies or products to join the export control list when it has applications in science or industry. Another externality here is that US biotech firms that sell products and services in China are likely to be hurt by too far-reaching an export control list (For more info on these considerations I recommend the report Two Worlds, Two Bioeconomies: The Impacts of Decoupling US–China Trade and Technology Transfer).
Foreign investment
With regards to foreign investment, the U.S. has been pretty active in response to Chinese investment in biotech. The Committee on Foreign Investment in the United States (CFIUS) which sits under the Department of Treasury is the body in charge of reviewing transactions involving foreign investment in the United States that could involve national security concerns. The Foreign Investment Risk Review Modernization Act of 2018 (FIRMA) expanded CFIUS’s purview to include subjecting even non-controlling foreign investments in companies with certain critical technologies or involved in sensitive data collection of US citizens. Under Firma, Chinese investment in U.S. biotech dropped sharply.
The article presents two biotech case studies where CFIUS has intervened:
Under its authority, CFIUS could and probably does try to prevent foreign actors from gaining bioweapon-enabling by means of technology transfer through foreign investment, but the same challenges around dual-use research are present.
Overall thoughts
The U.S. government’s focus on regulating foreign investment and doing export control stuff seems more broadly motivated by concerns about economic competitiveness, IP theft, and national security priorities (some more reasonable than others) that currently don’t cleanly reflect GCBR reduction priorities.
Any kind of unilateral approach on import-export regulations or even foreign investment is challenging since countries can find other vendors or companies of advanced biotech in Europe and China. That being said, the U.S. has the largest and most advanced bioeconomy so limiting the export of sensitive tech and products could certainly still limit some critical supplies, although I’m unsure of what.
One approach might be to limit more dual-use biotech under export controls at a baseline, but increase the capacity at BIS to oversee exceptions to the export control list. This way sales can be verified against military or other suspicious end users.
Thanks so much for your detailed comment, and sorry for not seeing it earlier!
I’m a bit unclear what’s going on in the Thermo-Fischer example: The second question from the initial letter makes it sound like TF had been granted a license to export under the EAR, but I don’t see a claim that the technology was covered by the Commerce Control List, and the response from Ross seems to suggest otherwise (from what I can tell, I’m behind the WSJ paywall).
In any event, I think this is just the same issue that comes up generally with regulation of dual-use technologies. There’s a question of whether technology with dual-use potential can be restricted from export under the CCL, and I think the answer to that is clearly yes (see, e.g., the restriction on software for DNA synthesizers). Then there’s the separate question of whether it should be restricted, and that’s going to require a context-dependent analysis of each case, with consideration of the balance of offensive and defensive uses of the tech. This is often a difficult question, but I think the analysis from a GCBR/advocacy perspective is going to be the same as it is for, say, differential development of technologies.
The concern about multilateral controls is a good one in general, though I think unilateral controls still pack a lot of punch when it comes to, e.g., publication of research by researchers at American universities.