By David Shepardson
WASHINGTON (Reuters) - The U.S. Commerce Department and other government agencies approved about 69.9% of export license applications involving China in the 2022 budget year, according to written testimony made public ahead of a U.S. House hearing Tuesday.
Under Secretary of Commerce for Industry and Security Alan F. Estevez will tell the House Foreign Affairs Committee that the U.S. government denied or returned-without-action approximately 30.1% percent of such license applications.
"Approvals of any licenses involving (China) are not
loopholes in our controls," Estevez said, adding "license
applications for (China) had an average processing time of approximately 77 days, which was significantly longer than the average processing time of approximately 40 days for all cases."
At the hearing titled "Combating the Generational Challenge of CCP Aggression" Estevez will tell lawmakers China "remains a huge focus of our enforcement efforts, and we will continue to prioritize this work in the coming year."
The Commerce Department's Bureau of Industry and Security (BIS) has over 639 China-based parties on its trade blacklist known as the "Entity List" and over 155 of those were added
during the Biden Administration, Estevez said.
Companies on the Entity List are restricted from receiving U.S.-origin goods and technology.
Commerce also maintains the Unverified List (UVL) that requires checks for U.S. technology use. Estevez said BIS conducted about 1,151 end-use checks in around 54 countries, where approximately 75% of checks were considered favorable.
He defended the restrictions especially on semiconductors.
"These changes are designed to address concerns related to the production of advanced semiconductors," Estevez said. "These controls are not intended to stop production of legacy semiconductors, and these controls are not tools of economic protectionism. They are national security and foreign policy tools."
BIS warned in October that unverified users could be moved to the more restrictive Entity List.
Estevez said it removed 25 of 28
entities from the unverified list after checks in late 2022. "This cooperation continues in 2023, but we are continuing to monitor cooperation closely," Estevez said.