No, that’s not a typo in the title. BIS, the Bureau of Industry and Security, is America’s primary trade watchdog agency in charge of overseeing national security, foreign policy, and economic objectives by maintaining an effective export control policy. Such oversight is intended to promote continued strategic technology leadership for the United States at a time when America is under the constant threat of national security vulnerability from foreign investors—sometimes cloaked behind layers of corporate anonymity—who aggressively seek to control our leading high-tech companies. BIS is kept busy round the clock closely monitoring exports, trade agreements, and potential investments for any sign that the fruits of our brainpower may be at risk. This month, BIS actions warded off unwanted foreign suitors trying to woo a U.S. technology bride.
Where Commerce and National Security Meet
As an agency of the Department of Commerce, BIS works with the business sector, universities, and government bureaus to promote business and market expansion while at the same time protecting America’s strategic business and technology interests. Its staff comprises economists, Nobel-winning scientists, foreign service officers, patent attorneys, law enforcement officers, and specialists in everything from international trade to aerospace engineering (source: www.commerce.gov).
As an example of just how convoluted the trail can be leading to the unmasking of offshore, game-changing investors, on December 2, 2016, President Obama signed an executive order called “Regarding the Proposed Acquisition of a Controlling Interest in Aixtron SE by Grand Chip Investment GmbH.” Acting pursuant to the provisions of the Defense Production Act of 1950, the president’s order contained the following findings as to the identity of the would-be investors seeking a controlling interest in American technology:
There is credible evidence that leads me to believe that: (1) Grand Chip Investment GmbH, a limited liability company organized under the laws of the Federal Republic of Germany (Grand Chip); (2) Grand Chip’s parent companies Grand Chip Investment S.a.r.l., a company organized under the laws of the Grand Duchy of Luxembourg (GC Investment), and Fujian Grand Chip Investment Fund LP, a limited partnership organized under the laws of the People’s Republic of China (Fujian Grand); and (3) Fujian Grand’s partners, Mr. Zhendong Liu, a citizen of the People’s Republic of China (Mr. Liu), and Xiamen Bohao Investment Co. Ltd., a company organized under the laws of the People’s Republic of China (Xiamen Bohao and, together with Grand Chip, GC Investment, Fujian Grand, and Mr. Liu, the Purchasers), through exercising control of the U.S. business of AIXTRON SE., a company organized under the laws of the Federal Republic of Germany (Aixtron), might take action that threatens to impair the national security of the United States.
Chipping Away at Our Tech Supremacy
The president’s order went on to specify why this particular US company was of such importance to warrant a presidential order: “The U.S. business of Aixtron consists of …the equity interests of Aixtron, Inc., and any asset of Aixtron or Aixtron, Inc. used in, or owned for the use in or benefit of, the activities in interstate commerce in the United States of Aixtron, Inc., including without limitation any interest in any patents issued by, and any interest in any patent applications pending with, the United States Patent and Trademark Office (collectively, Aixtron US).”
BIS behind the Scenes
Given the president’s findings and the strategic interests of the United States in safeguarding the patents of the company, it is no wonder that his order banned the acquisition of a controlling interest in the company by the consortium noted above. All in a day’s work for America’s Good Shepherd of Trade and Export—BIS.