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Topic: Artificial Intelligence (AI) Blog Brand: Techland Region: Americas, and Asia Tags: AI Action Plan, China, Chip Security Act, Export Controls, North America, Semiconductors, and United States Why Enforcement Will Determine the Chip Security Act’s Success April 8, 2026 By: Fred Bailey
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Export controls are only as strong as their enforcement, and without operational capacity, US semiconductor restrictions will continue to fail in practice.
The House Foreign Affairs Committee advanced the Chip Security Act during markup, making it eligible for consideration by the full House of Representatives. The legislation supports President Donald Trump’s AI Action Plan and seeks to strengthen safeguards on advanced semiconductor exports, particularly to address the diversion of US chips to foreign adversaries through intermediary networks. The Act reflects a clear understanding of the strategic importance of advanced semiconductors. Where it falls short is in what it takes to actually control them.
The Chip Security Bill Gets the Stakes Right
Recent indictments tied to the diversion of advanced artificial intelligence (AI) chips to China should settle any lingering debate on whether preventing the illicit proliferation of American semiconductors is a theoretical risk or a future concern. It is happening now, at scale, through networks that are exploiting gaps in enforcement—not gaps in policy. The question is not whether export controls are necessary. The question is whether we are serious about enforcing them. The emerging answer is mixed.
The proposed Chip Security Act is a step in the right direction. It acknowledges a fundamental reality in that export controls cannot be based on good faith, in which reliance is based on self-certification from the exporter and documentation is accepted at face value. That premise has already been tested—and is proven to have failed. A bipartisan Senate letter to the Department of Commerce makes this clear, pointing to evidence that advanced chips continued to reach China through intermediary networks even after controls were implemented.
An Enforcement Problem, Not a Policy Failure
That letter highlights a deeper issue. For years, policymakers relied on assurances from industry that diversion was unlikely—that the size, complexity, and visibility of these systems made illicit transfer impractical. Those assumptions were not only incorrect; they were contradicted by publicly available reporting at the time.
We now know what that looks like in practice. According to recent federal charges, actors used shell companies, falsified documentation, and transshipment hubs to move billions of dollars’ worth of AI-capable systems into China. It was a concerted effort that leveraged illicit networks, weak control points across jurisdictions, compliance systems, and oversight mechanisms. That distinction matters.
The United States has built a policy framework designed to restrict access to the most advanced chips. In many respects, it is working. China still faces structural constraints in replicating leading-edge semiconductor capabilities. But that advantage is conditional. It depends on denying not just legal access, but practical access.
That is where the current model breaks down.
Export controls today are still largely transactional. They are built around licensing decisions, end-user assurances, and compliance certifications. Those are necessary components of the system. They are not sufficient for securing American technology.
The threat environment has evolved to a point where procurement is not a linear transaction between exporter and end user. Procurement is distributed, adaptive, and deliberately opaque. It operates through intermediaries in jurisdictions where enforcement is inconsistent and incentives to cooperate are limited. This reality enables illicit transfers—and demands a different approach.
Export Controls Are Built for a Different System
The Chip Security Act contains provisions aimed at improving detection, strengthening traceability, and increasing accountability. However, legislation alone does not solve the problem. Without the enforcement capacity to operationalize those authorities, the Act risks reinforcing the same dynamic it is trying to correct: the appearance of control without the ability to enforce it.
The core issue is structural.
The Bureau of Industry and Security has been tasked with enforcing one of the most consequential technology control regimes in modern history. At the same time, in 2025, it faced reductions in both budget and resources. That mismatch is not sustainable. BIS is now, in effect, a frontline national security organization responsible for monitoring global semiconductor flows, amongst other industry technology compliance measures. It functions by identifying illicit procurement networks and coordinating enforcement actions across jurisdictions. That requires a fusion of investigators, analysts, interagency partnerships, and technical expertise at a scale commensurate with the mission. Right now, it does not have it, and while fiscal year 2026 budgets have increased, the 2025 disruptions are undeniable.
This is where the Chip Security Act only partially addresses the problem. Expanding authorities without expanding capacity creates a bottleneck. It assumes that the primary constraint is legal. It is not. The constraint is operational, and enforcement also does not stop at the US border.
Every diversion case reinforces the same point: third-country jurisdictions are the critical battleground. Malaysia, Singapore, Thailand, and others are not the origin of the problem, but they are the pathways through which it is enabled. As one lawmaker put it, “every chip that reaches Beijing through a Malaysian shell company or a Thai front entity is a chip that should never have left the country.”
That is not something BIS can solve alone.
Authorities Without Capacity and Enforcement Beyond US Borders
The Department of State must play a more assertive role in aligning partner countries around enforcement expectations. This is not simply a matter of coordination. It is a matter of pressure. Export controls only work if partner nations treat diversion as a shared security problem rather than a commercial opportunity, and one that they cannot allow to proliferate.
There is also an underutilized tool already in place: each Chief of Mission has Legal Attachés from the Federal Bureau of Investigation (FBI). These relationships provide a direct mechanism to translate US intelligence and investigative leads into partner-country action. When leveraged effectively, they can enable arrests, seizures, and prosecutions that disrupt networks at their source. But that requires prioritization. It requires treating semiconductor diversion not as a regulatory compliance issue, but as a transnational threat network with direct national security implications.
The United States has a narrow window to get this right. It still holds a decisive advantage in advanced semiconductor technology. That advantage is not permanent. It is sustained through a combination of innovation, policy, and enforcement.
Right now, enforcement is the weakest link.
The Chip Security Act recognizes the problem. It does not yet fully solve it. Without sustained investment in BIS, a more forceful diplomatic posture, and a shift toward intelligence-led network disruption, export controls will continue to constrain access on paper while adversaries procure capability in practice.
Control is not defined by what you prohibit. It is defined by what you can actually prevent.
At the moment, those are not the same thing.
About the Author: Fred Bailey
Fred Bailey is a cybersecurity and national security leader with over 20 years of experience in protecting critical infrastructure and securing the US energy landscape. He has directed strategies countering nation-state threats across the energy, transportation, and communications sectors. A US Army veteran, Fred recently retired from federal service where he has led intelligence operations, risk mitigation, and resilience planning for Homeland Security to safeguard industrial and energy supply chains, ensuring both economic security and national defense readiness.
The post Why Enforcement Will Determine the Chip Security Act’s Success appeared first on The National Interest.
Источник: nationalinterest.org