Emerging Technologies

The Emerging Technologies industry encompasses a range of rapidly advancing fields, including artificial intelligence (AI), quantum computing, biotechnology, and advanced telecommunications. These technologies are pivotal in driving economic growth, enhancing military capabilities, and addressing national security challenges. 

The U.S. government, through agencies such as the Bureau of Industry and Security (BIS) and the Directorate of Defense Trade Controls (DDTC), establishes guidelines and controls to ensure that sensitive technologies do not fall into the hands of adversaries. The Export Administration Regulations (EAR), administered by BIS, controls the export of dual-use technologies—items that have both civilian and military applications. The ITAR, administered by DDTC,  governs the export and temporary import of defense articles and services listed on the United States Munitions List (USML). Sanctions programs, enforced by the Office of Foreign Assets Control (OFAC), restrict business dealings with certain countries, entities, and individuals. Businesses navigating the emerging technology sector must comply with sanctions which can range from sectoral sanctions affecting industries like aerospace and communications to comprehensive embargoes. Compliance measures should include comprehensive due diligence, customer screening, and ongoing monitoring.

The Committee on Foreign Investment in the United States (CFIUS) reviews foreign investments for potential national security risks. As the need for emerging technologies intensifies, CFIUS has increased its scrutiny of sectors such as AI, robotics, quantum computing, and biotech. In addition to inbound investment reviews by CFIUS, the U.S. has implemented outbound investment controls to address potential national security threats posed by the flow of capital into sensitive technology sectors in China. These measures aim to prevent U.S. investments from bolstering technological advancements in rival nations that could compromise U.S. strategic advantages.

Representative Experience

  • Representing a telecommunications services company before CFIUS in its acquisition by a foreign investment fund buyer.
  • Representing a foreign emerging technologies company before CFIUS in its acquisition of the assets and intellectual property of a U.S. business.
  • Developing trade compliance programs for a manufacturer and exporter of mass spectrometry devices.
  • Conducting an internal investigation, preparing, and submitting a prior disclosure to U.S. Customs and Border Protection related to underpayment of duties on behalf of a virtual reality start-up.
  • Classifying numerous items in the emerging and critical technologies industries to determine export control requirements or potential application of CFIUS mandatory filing requirements.
  • Advising the maker of technologies for autonomous vehicles on compliance with export control regulations.

INSIGHTS

Commerce Imposes Sweeping New Rule Restricting Exports of AI Chips

By: Olga Torres, Managing Member, and Derrick Kyle, Senior Associate
Date: 01/14/2025

On January 13, 2025, the Department of Commerce Bureau of Industry and Security (BIS) announced new rules restricting the export of advanced artificial intelligence (AI) chips and certain closed AI model weights in an expected move that was preemptively criticized by giants in the tech and semiconductor industries. The 168-page “Framework for Artificial Intelligence Diffusion” interim final rule (the “Rule”) adds a global licensing requirement for the export of advanced AI chips and closed AI model weights but with certain exclusions for some allied countries. Compliance with most portions of the new rule is required by May 15, 2025, and interested persons may submit public comments on the rule until May 15, 2025.

Preparing for Customs Duties Under President Trump: Strategies for Consideration

By: Olga Torres, Managing Member
Date: 01/07/2025

In this continued era of protectionist and mercantilist trade policies arising from the United States, there are strategies that can be carefully evaluated and pursued to maximize Customs duty savings when importing. This article briefly summarizes a few strategies. Importantly, all duty saving strategies are heavily scrutinized by the government and should be carefully evaluated before implementation. 

Export Controls on Chips to China Typify the Biden Administration’s National Security Strategy for Outcompeting China

By: Olga Torres, Managing Member
Date: 11/04/2022

On October 7, 2022, the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) announced a major new rule that restricts the ability of the People’s Republic of China (“PRC” or “China”) to obtain advanced computing chips
 

BIS’s New Approach to Identifying “Emerging and Foundational Technologies”

Date: 07/01/2022

On May 23, 2022, the U.S. Department of Commerce Bureau of Industry and Security (“BIS”) published a proposed rule identifying new unilateral export controls on four dual-use biological marine toxins, the synthesis and collection of which BIS has identified for evaluation in accordance with the criteria set forth in Section 1758 of the Export Control Reform Act of 2018 (“ECRA”).1 Section 1758 requires BIS to identify and establish appropriate controls on the export, reexport, or transfer (in-country) of “emerging and foundational technologies” that are “essential to the national security of the United States.”2 Importantly, the proposed rule announced a change in BIS’s approach to identifying new technologies of high strategic importance for control: moving forward, BIS will no longer distinguish between “emerging technologies” and “foundational technologies,” but rather “will characterize all technologies identified pursuant to Section 1758 as ‘Section 1758 technologies.’”

FinCEN Crypto & Ransomware Guidance: Will 2022 Bring More Changes?

By: Olga Torres, Managing Member
Date: 01/18/2022

The Financial Crimes Enforcement Network (“FinCEN”) of the U.S. Department of the Treasury (“Treasury”) has made clear that businesses engaging in certain activities involving virtual currencies are subject to registration, reporting, recordkeeping, and other anti-money laundering (“AML”) requirements under the Bank Secrecy Act and its implementing regulations (collectively, “BSA”). In response to recent developments in the field of financial technology (“fintech”), FinCEN has issued new guidance and advisories related specifically to activities involving virtual currencies and ransomware payments.

This article introduces FinCEN and the BSA, identifies AML risks associated with virtual currencies and ransomware that businesses may encounter in 2022 and beyond, and discusses best practices for navigating the complex and rapidly evolving BSA landscape.

Crypto Crackdown: OFAC Sanctions SUEX Cryptocurrency Exchange

By: Olga Torres, Managing Member & Derrick Kyle, Senior Associate
Date: 10/14/2021

On September 21, 2021, in a first-of-it-kind action, the U.S. Department of the Treasury Office of Foreign Assets Control (“OFAC”) imposed economic sanctions on SUEX OTC, S.R.O. (“SUEX”), a virtual currency exchange,