The Emerging List of "Emerging and Foundational Technologies"

The Situation: On November 14, 2018, the U.S. Department of Commerce ("Commerce")'s Bureau of Industry and Security ("BIS") issued an advanced notice of proposed rulemaking ("Notice") that seeks public comments for defining and identifying "emerging" technologies that will be subject to export controls.

The Result: Businesses with technologies in the 14 "representative general categories" identified in the Notice should consider submitting public comments on whether their technologies should be considered "emerging."

Looking Ahead: After the comment period closes, BIS will issue the Notice identifying specific "emerging and foundational" technologies and then issue controls on the export, re-export, or transfer of those technologies.  

On August 13, 2018, U.S. President Donald J. Trump signed the John S. McCain National Defense Authorization Act for Fiscal Year 2019, which contained the Export Control Reform Act of 2018 ("ECRA") and the Foreign Investment Risk Review Modernization Act of 2018 ("FIRRMA"). Section 1758 of the ECRA calls for the U.S. Departments of Commerce, Defense, Energy, State, and other agencies to coordinate a regular, ongoing process to identify "emerging and foundational" technologies that are essential to the national security of the United States.

In addition, as we previously explained, FIRRMA authorizes the creation of a "pilot program" that mandates the filing of declarations with the Committee on Foreign Investment in the United States ("CFIUS") for certain transactions involving U.S. businesses with "critical technologies," which is defined as including the "emerging and foundational" technologies controlled under § 1758 of the ECRA. On November 14, 2018, BIS published the Notice, which seeks public comments on the criteria for defining and identifying "emerging" technologies, as well as comments "on treating emerging and foundational technologies as separate types of technologies."

While it was anticipated that BIS would publish a proposed list of specific "emerging and foundational" technologies for public comment, BIS has instead issued a list of general categories of "emerging" technologies only. According to BIS, the listed categories are a "representative list of the technology categories from which Commerce, through an interagency process, seeks to determine whether there are specific emerging technologies that are important to the national security of the United States for which effective controls can be implemented that avoid negatively impacting U.S. leadership in the science, technology, engineering, and manufacturing sectors." The categories are as follows:

1. Biotechnology, such as: (i) Nanobiology; (ii) Synthetic biology; (iii) Genomic and genetic engineering; or (iv) Neurotech
2. Artificial intelligence (AI) and machine learning technology, such as: (i) Neural networks and deep learning (e.g., brain modelling, time series prediction, classification); (ii) Evolution and genetic computation (e.g., genetic algorithms, genetic programming); (iii) Reinforcement learning; (iv) Computer vision (e.g., object recognition, image understanding); (v) Expert systems (e.g., decision support systems, teaching systems); (vi) Speech and audio processing (e.g., speech recognition and production); (vii) Natural language processing (e.g., machine translation); (viii) Planning (e.g., scheduling, game playing); (ix) Audio and video manipulation technologies (e.g., voice cloning, deepfakes); (x) AI cloud technologies; or (xi) AI chipsets 
3. Position, Navigation, and Timing (PNT) technology
4. Microprocessor technology, such as: (i) Systems-on-Chip (SoC); or (ii) Stacked Memory on Chip
5. Advanced computing technology, such as Memory-centric logic
6. Data analytics technology, such as: (i) Visualization; (ii) Automated analysis algorithms; or (iii) Context-aware computing
7. Quantum information and sensing technology, such as: (i) Quantum computing; (ii) Quantum encryption; or (iii) Quantum sensing
8. Logistics technology, such as: (i) Mobile electric power; (ii) Modeling and simulation; (iii) Total asset visibility; or (iv) Distribution-based Logistics Systems (DBLS)
9. Additive manufacturing (e.g., 3D printing)
10. Robotics, such as: (i) Micro-drone and micro-robotic systems; (ii) Swarming technology; (iii) Self-assembling robots; (iv) Molecular robotics; (v) Robot compliers; or (vi) Smart Dust
11. Brain-computer interfaces, such as: (i) Neural-controlled interfaces; (ii) Mind-machine interfaces; (iii) Direct neural interfaces; or (iv) Brain-machine interfaces
12. Hypersonics, such as: (i) Flight control algorithms; (ii) Propulsion technologies; (iii) Thermal protection systems; or (iv) Specialized materials (for structures, sensors, etc.)
13. Advanced materials, such as: (i) Adaptive camouflage; (ii) Functional textiles (e.g., advanced fiber and fabric technology); or (iii) Biomaterials
14. Advanced surveillance technologies, such as Faceprint and voiceprint technologies.

Notably, these categories cover only "emerging" technologies, and the Notice indicates that BIS is seeking additional comments "on treating emerging and foundational technologies as separate types of technology." This may indicate that BIS will publish a separate advanced notice regarding categories of "foundational" technologies.

After the comment period closes, BIS will issue another advanced notice identifying specific "emerging and foundational" technologies and then issue controls on the export, re-export, or transfer of those technologies. While BIS has discretion in setting the level of export controls, at minimum, businesses with "emerging and foundational" technologies will require a license to export those technologies to certain countries. In addition, if a foreign person seeks to invest in a U.S. business that "produces, designs, tests, manufactures, fabricates, or develops" an "emerging or foundational" technology, the parties to that transaction may be required to file a mandatory declaration with CFIUS.

Therefore, businesses with technologies that potentially could fall under these categories should consider submitting comments regarding whether their technologies should be deemed "emerging and foundational." In making this assessment, businesses should interpret the above categories broadly because this list of categories is "representative," and the subcategories identified are non-exhaustive.

Three Key Takeaways

1. BIS has identified general categories of "emerging" technologies but has not yet identified specific "emerging and foundational" technologies subject to export controls.
2. Businesses should consider whether their technologies potentially fall under the 14 general categories of "emerging" technologies and consider submitting comments if they do.
3. Businesses should monitor for separate advanced notices of proposed rulemaking, listing categories of "foundational" technologies and identifying specific "emerging and foundational" technologies.

Lawyer Contacts

For further information, please contact your principal Firm representative or the lawyers listed below. General email messages may be sent using our "Contact Us" form at www.jonesday.com/contactus/.  

Laura Fraedrich
Washington
+1.202.879.3646
lfraedrich@jonesday.com

Justin T. Huff
Washington
+1.202.879.3760
jthuff@jonesday.com

Chase D. Kaniecki
Washington
+1.202.879.3734
ckaniecki@jonesday.com 

Christopher M. Tipler
Washington
+1.202.879.3649
ctipler@jonesday.com

D. Grayson Yeargin
Washington
+1.202.879.3634
gyeargin@jonesday.com

Lindsey M. Nelson
Washington
+1.202.879.3735
lmnelson@jonesday.com 

Diego A. Ortega
Washington
+1.202.879.4662
dortega@jonesday.com 

Jones Day publications should not be construed as legal advice on any specific facts or circumstances. The contents are intended for general information purposes only and may not be quoted or referred to in any other publication or proceeding without the prior written consent of the Firm, to be given or withheld at our discretion. To request reprint permission for any of our publications, please use our "Contact Us" form at www.jonesday.com. The mailing of this publication is not intended to create, and receipt of it does not constitute, an attorney-client relationship. The views set forth herein are the personal views of the authors and do not necessarily reflect those of the Firm.