Assistant Secretary for Export Enforcement Matthew S. Axelrod Delivers Remarks at the Semiconductor Summit in Los Angeles, California
May 8, 2024
Remarks as Prepared for Delivery
Thank you to Martin, Izzy, and Tara for putting together today’s summit and for inviting me along. Your U.S. Attorney’s Offices are on the leading edge of technology protection efforts, and I’m thrilled to get to partner with you in this work.
Unlike my three DOJ colleagues, I work at the Department of Commerce, where I lead a dedicated cadre of law enforcement agents and analysts who work all day every day to keep our country’s most sensitive technologies out of the world’s most dangerous hands.
And no technology is a higher priority for us than semiconductors. As our Secretary of Commerce, Gina Raimondo, recently put it, “If you think about national security today in 2024, it’s not just tanks and missiles; it’s technology. It’s semiconductors.” It’s semiconductors. Your industry is at the heart of one of our nation’s most pressing national security challenges: preventing foreign governments from using our advanced technologies – your advanced technologies – against us and our allies.
Semiconductors are at the very center of my team’s work. For the most advanced, cutting-edge chips, we strictly control the ability of the People’s Republic of China to obtain them. Put simply, we won’t permit the Chinese government to use our most sophisticated chips to advance their military modernization efforts or enable human rights abuses. My team works with our federal law enforcement partners, here in California and across the country, to make sure our advanced semiconductor restrictions are followed and that any violations are detected and punished.
Our efforts to degrade Russia’s ability to wage war in Ukraine are also heavily semiconductor-focused. I traveled to Kyiv last year with DOJ and FBI officials to meet with our Ukrainian government counterparts. We visited a Ukrainian forensic lab, where they examine the insides of downed missiles and drones. The components we saw at the lab told a powerful and distressing story. Russia is using Western electronics, semiconductors in particular, to power their missiles, unmanned aerial vehicles, and other weapons systems used to target and kill Ukrainians. We are partnering closely with the Ukrainian government to disrupt the procurement networks that get these chips from the U.S. to Russia.
This centrality of semiconductors to national security is among the reasons we stood up the Disruptive Technology Strike Force last year with the Department of Justice. The Strike Force, a powerful partnership between Commerce, Justice, FBI, HSI, and the Defense Criminal Investigative Service, aims to prevent nation-state actors – like Russia, the PRC, and Iran – from acquiring our most sensitive technologies and using them for malign purposes. To date, the Strike Force has brought 16 criminal indictments against 26 defendants. Fourteen of those defendants have been charged with crimes related to their procurement of electronic components, including semiconductors. Just last week, a Brooklyn resident pleaded guilty for his role in shipping a quarter of a million dollars’ worth of semiconductors and other electronic components from the United States to companies affiliated with the Russian military.
But even this impactful coordinated effort across government enforcement agencies is, by itself, insufficient to meet the national security moment we’re facing. We need industry’s help. We need your help. You don’t want your product found on the battlefield in Ukraine or your technology used by an authoritarian government to repress its population (both all too common real-world examples). We’re doing all we can to incentivize compliance, including conducting extensive outreach, publishing advisories and best practices documents, and updating our enforcement policies, to help drive compliance. We even published a sample end-use certification form, to help companies prevent diversion of high-priority battlefield items, like semiconductors, to the Russian war machine.
But, frankly, we need everyone to do more. Last year, we sent U.S. microelectronics companies “red flag” letters identifying specific customers of theirs who had been identified in customs data as continuing to ship semiconductors and other microelectronics to Russia. We’ve since gone further. We’ve now identified a list of over 600 foreign parties who continue to ship these high-priority items to Russia and have sent this list to U.S. manufacturers and distributors who make and sell products – like semiconductors – that continue to be found in recovered missiles and drones inside Ukraine. We’ve asked the American companies to stop shipping to these 600 foreign parties due to the high risk of transshipment to Russia.
As I saw firsthand in Kyiv, the full-scale Russian invasion poses an existential threat to the people of Ukraine. We need to work together to meet the urgent challenge of degrading Russia’s ability to wage war against the Ukrainian people. And we need to work together to meet the urgent challenge of preventing the PRC from using our cutting-edge chips – your cutting-edge chips – to modernize their military capabilities or restrict human rights.
The world has changed. And we must change with it. Your products are now so powerful that they stand at the core of our country’s national security efforts. Together, we must do even more to ensure that they remain protected from abuse by those who would do us and our allies harm.
Thank you.