U.S. Department Of Commerce Imposes Immediate Export Controls On Artificial Intelligence Software Used To Automatically Detect And Identify Objects Remotely

Author:Mr Charles Capito, III, Nicholas J. Spiliotes, John P. Carlin and Joseph A. Benkert
Profession:Morrison & Foerster LLP
 
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On January 6, 2020, the U.S. Department of Commerce's Bureau of Industry and Security (BIS) published an interim final rule amending the Export Administration Regulations (EAR) to place new restrictions on the export of certain software specially designed for automating the analysis of geospatial imagery and collections of data points.

This new rule sheds light on U.S. government concerns regarding the application of artificial intelligence (AI) to the analysis of increasingly available, large geospatial data sets, and the specific role it can play in remotely detecting and identifying objects of interest for military and intelligence purposes. The use of an emergency authorization to make these controls effective immediately also underscores the perceived urgency in controlling the transfer of this technology to non-allied countries. In addition to their impact on U.S. trade, the new restrictions will have important implications for reviews of foreign investment in U.S. companies by the Committee on Foreign Investment in the United States (CFIUS).

Key Takeaways:

  1. BIS appears to have prioritized controls on this type of AI technology because of its potential military and intelligence applications. The scope of the new rule is quite narrow - it applies only to software that uses neural networks (a subset of AI) to detect and identify objects of interest (such as vehicles or houses) in geospatial imagery or “point clouds” (i.e., sets of defined data points, such as those produced in 3D scans). In addition to broader concerns about the transfer of advanced technology to non-allied countries, BIS's decision to focus on this specific type of software is likely based on the significant national security implications associated with the ability to remotely and rapidly detect, identify, and respond to threats, and to collect other key intelligence information.

  2. Use of the EAR's emergency authorization highlights the Administration's perceived urgency in controlling the transfer of this technology as an element of current U.S. national security and foreign policy. BIS imposed the new control in the Export Control Classification Number (ECCN)0Y521 series, which enables BIS to place controls on previously uncontrolled items with immediate effect where the U.S. government determines that the items might provide a significant military or intelligence advantage to the United States.1 BIS may use the 0Y521-series authorization to implement additional...

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