Washington: The US on Tuesday signalled a sharp escalation in export control enforcement, warning that companies and individuals violating dual-use technology restrictions would face tougher penalties and increased scrutiny.
Testifying before the House Committee on Foreign Affairs’ South and Central Asia Subcommittee, David Peters, Assistant Secretary for Export Enforcement at the Bureau of Industry and Security (BIS), said the risks to American technology had “never been higher”.
“Our adversaries are determined to gain access to our best dual-use technologies to erase America’s economic and military preeminence,” Peters told lawmakers in his prepared remarks. “Export Enforcement (EE) stands at the forefront of protecting America’s technological edge.”
He said the administration was “stepping up enforcement actions in all areas” under President Donald Trump and Commerce Secretary Howard Lutnick, describing a proposed 123 per cent funding increase in the 2026 President’s Budget as “a historic and transformative America First investment in safeguarding our Nation’s national security.”
In his testimony, Peters acknowledged that while Congress had recently provided additional resources, enforcement capacity remained stretched. “Nevertheless, our resources are spread thin,” he said, adding that BIS would prioritise hiring more personnel, advanced analytics, international partnerships, and training programmes to confront what he called an “evolving threat landscape.”
Highlighting recent actions, Peters pointed to indictments and arrests in Texas and Florida involving “individuals and entities engaged in smuggling and unlicensed exports of advanced AI chips and GPUs.”
He also detailed significant civil penalties over the past year. BIS imposed a $95 million penalty against Cadence Design Systems for unlawfully exporting critical technology to companies on the Entity List and a $1.5 million penalty against Exyte Management for failing to prevent in-country transfers to listed entities.
“Just two weeks ago, we announced a $252 million settlement with Applied Materials for illegally exporting semiconductor manufacturing equipment to a company on the Entity List,” Peters said, describing it as “a statutory maximum penalty and the second largest ‘stand-alone’ penalty ever imposed by BIS.”
He delivered a blunt warning: “My message on enforcement is clear—follow the law or be prepared for the consequences.”
At the same time, Peters argued that existing financial penalties under the Export Control Reform Act (ECRA) were insufficient. Current maximum fines stand at twice the value of the unlawful transaction or approximately $374,000 per violation, compared to up to $1.2 million per violation under the Arms Export Control Act governing military exports.
“Simply put, ECRA’s financial penalties are not enough to punish and deter bad actors and to create a culture of compliance in companies,” he said, adding that the administration welcomed working with Congress to consider stronger penalties.
Peters noted that enforcement efforts generated significant returns. In fiscal year 2025, EE was funded at $87 million but generated $192 million in criminal and administrative penalties, more than $81 million in criminal forfeitures, and $5 million in restitution.
The BIS oversees the civil and criminal enforcement of US dual-use export control laws, covering technologies with both commercial and military applications.
In recent years, Washington has tightened restrictions on advanced semiconductor exports, particularly those linked to artificial intelligence and high-performance computing, amid growing concerns over technology transfers to strategic competitors.
(IANS)
