Thousands of export license requests from U.S. companies, many involving sensitive technologies bound for China, are facing prolonged delays due to internal disruption at the U.S. Department of Commerce, as reported by Wion, citing Reuters. According to the Reuters report, operational dysfunction within the Bureau of Industry and Security (BIS), the agency responsible for processing these licenses, has led to major delays, creating widespread uncertainty for affected businesses and industries.
Among the affected applications is Nvidia’s request to export its H20 artificial intelligence (AI) chip to China. Although Commerce Secretary Howard Lutnick and other officials stated in July that these licenses would be approved, reports indicate that none have been granted to date.
Nvidia had planned to start shipments shortly after receiving confirmation in mid-July. The agency’s gridlock has left numerous U.S. companies awaiting export licenses for a broad spectrum of products, including semiconductor manufacturing tools and advanced sensors.
A U.S. official noted that the current backlog of license applications is the worst in over 30 years. In fiscal year 2023, the BIS handled 37,943 export license requests, with an average processing time of 38 days per application. However, the agency is struggling to manage the rising number of submissions, particularly those related to sensitive technologies.
Sean Stein, president of the U.S.-China Business Council, highlighted that numerous industries are experiencing stagnation in license applications, including those for semiconductor manufacturing equipment worth billions. He cautioned that continued delays are prompting Chinese firms to seek alternative sources, putting U.S. market share at risk.
Furthermore, the Commerce Department has postponed several regulatory changes. In May, it stated plans to revoke a Biden-era rule limiting the destinations for AI chip exports, but the revision has not yet been enacted. Additional updates, including expanded restrictions targeting subsidiaries of blacklisted firms, also remain unreleased.
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