WASHINGTON– The United States on Tuesday signaled a sharp escalation in enforcement of export control laws, warning that companies and individuals who violate restrictions on dual-use technologies will face stiffer penalties and heightened scrutiny.
Testifying before the House Committee on Foreign Affairs’ South and Central Asia Subcommittee, David Peters, Assistant Secretary for Export Enforcement at the Bureau of Industry and Security, said the risks to U.S. technology and national security have intensified.
“Our adversaries are determined to gain access to our best dual-use technologies to erase America’s economic and military preeminence,” Peters said in prepared remarks. “Export Enforcement stands at the forefront of protecting America’s technological edge.”
Peters said the administration is stepping up enforcement actions across the board under President Donald Trump and Commerce Secretary Howard Lutnick. He described a proposed 123 percent funding increase for export enforcement in the 2026 President’s Budget as “a historic and transformative America First investment in safeguarding our Nation’s national security.”
Despite recent congressional support, Peters acknowledged that enforcement resources remain strained. “Nevertheless, our resources are spread thin,” he said, adding that the agency plans to prioritize hiring additional personnel, deploying advanced analytics, strengthening international partnerships, and expanding training programs to address what he called an evolving threat environment.
He cited recent indictments and arrests in Texas and Florida involving individuals and entities accused of smuggling and conducting unlicensed exports of advanced artificial intelligence chips and graphics processing units.
Peters also highlighted major civil penalties imposed over the past year. The Bureau of Industry and Security levied a $95 million penalty against Cadence Design Systems for unlawfully exporting critical technology to companies on the Entity List, and a $1.5 million penalty against Exyte Management for failing to prevent in-country transfers to listed entities.
“Just two weeks ago, we announced a $252 million settlement with Applied Materials for illegally exporting semiconductor manufacturing equipment to a company on the Entity List,” Peters said. He described the settlement as “a statutory maximum penalty and the second largest ‘stand-alone’ penalty ever imposed by BIS.”
He issued a direct warning to industry. “My message on enforcement is clear—follow the law or be prepared for the consequences,” he said.
At the same time, Peters argued that existing financial penalties under the Export Control Reform Act are inadequate. Current maximum fines are capped at twice the value of the unlawful transaction or about $374,000 per violation, compared with penalties of up to $1.2 million per violation under the Arms Export Control Act, which governs military exports.
“Simply put, ECRA’s financial penalties are not enough to punish and deter bad actors and to create a culture of compliance in companies,” Peters said, adding that the administration is open to working with Congress on stronger penalties.
He noted that enforcement efforts are already generating substantial returns. In fiscal year 2025, export enforcement received $87 million in funding but generated $192 million in criminal and administrative penalties, more than $81 million in criminal forfeitures, and $5 million in restitution.
The Bureau of Industry and Security oversees the civil and criminal enforcement of U.S. export control laws covering dual-use technologies with both commercial and military applications. In recent years, Washington has tightened restrictions on advanced semiconductor exports, particularly those linked to artificial intelligence and high-performance computing, amid growing concerns over technology transfers to strategic competitors. (Source: IANS)
