BIS's New Enforcement KPI - Challenges and Opportunities
Notas do episódio
Mike and Brent provide their day-of reactions to July 14, 2026, testimony by U.S. Department of Commerce Under Secretary for Industry & Security, Jeffrey Kessler, before the Foreign Affairs Committee of the U.S. House of Representatives. Although much of the coverage of the hearing and the Under Secretary’s remarks has focused on the Members of Congress questioning why more rules and Entity List additions haven’t been forthcoming, Mike and Brent highlight the Under Secretary’s own emphasis on more enforcement—not more rulemaking or entity-listing—as being the key metric for U.S. national security.
Mike and Brent discuss their main takeaways from the Under Secretary’s testimony (02:00); the increase in monetary penalties imposed by the Bureau of Industry & Security (“BIS”) from 2024 to 2025 and during the first half of 2026 (07:28); what BIS is requesting for FY2027 and what they will do with it, including adding 370 new Office of Export Enforcement Agents (09:43); how the Under Secretary responded to criticism, including his remark that “I do not think that more regulation equates to more national security” (12:12); why misperceived loopholes will continue to lead to liability pitfalls (13:19); the return of U.S. congressional focus on battlefield recoveries (13:56); the Under Secretary’s invitation for Congress to judge his and BIS’s success based on enforcement (16:52); how and why the “high probability” standard is an opportunity for compliance teams in these circumstances to do more with less or on tight budgets (19:40); how taking a fresh look at the meaning of “red flags,” “possibility,” and “probability” can all help take advantage of such opportunities (28:03); and the confirmed death of the AI Diffusion Rule (32:42).
Mike and Brent then conclude with this episode’s “Managing Up” segment (36:24).
Under Secretary Kessler’s prepared remarks, hearing video link, and other materials: https://foreignaffairs.house.gov/committee-activity/hearings/fy27-bis-budget-the-ai-arms-race-and-the-icts-office
Eleanor Olcott, “Nvidia’s Banned AI Chips Double in Price on China’s Black Market,” Financial Times (Jun. 23, 2026) (subscription required): https://www.ft.com/content/57fcd3ce-464f-4dc2-8ea2-5712d4972c69?syn-25a6b1a6=1
Red Flags Rising Episode 22, “All-In on America's AI Action Plan”: https://rss.com/podcasts/red-flags-rising/2140126
Red Flags Rising Episode 39, “Pull, Push, Tap, Aim, Fire - What Recent Settlements and Indictments Teach about Clearing Compliance Jams”: https://rss.com/podcasts/red-flags-rising/2778961