Senator Mike Rounds, US Senator for South Dakota | Official U.S. Senate headshot
Senator Mike Rounds, US Senator for South Dakota | Official U.S. Senate headshot
U.S. Senators Mike Rounds of South Dakota and Mark Warner of Virginia have put forward legislation titled the Stop Stealing our Chips Act, targeting the smuggling of American-made AI chips into China. This legislation seeks to amend the Export Control Reform Act by establishing a whistleblower incentive program within the Bureau of Industry and Security (BIS).
According to Senator Rounds, "The United States has taken extensive measures to prevent American-made AI chips from falling into the wrong hands, particularly China." He further emphasized the national security concerns, highlighting China's use of backdoor methods to smuggle chips and the necessity of rewarding whistleblowers to strengthen export control enforcement.
Senator Warner highlighted the role of U.S. export control laws in protecting national security, stating, "Unfortunately, too often, violations of these laws go unreported and undetected." He pointed out that the new legislation creates incentives for whistleblowers to aid in identifying violations, improving BIS's ability to prevent illegal diversions.
The smuggling of AI chips into China poses significant national security risks. Past reports have identified at least eight Chinese networks conducting smuggling operations with transactions surpassing $100 million each, with chips often ending up with sanctioned entities such as military research fronts linked to the People's Liberation Army.
The proposed legislation will require BIS to establish a secure online platform for whistleblowers to submit reports and set up a fund to pay rewards, sourced from fines collected for export control violations. Whistleblowers could receive between 10 and 30 percent of the fines collected, provided the information is original and leads to regulatory action, excluding cases involving known terrorists, criminals, or federal employees performing in their official capacity.
This initiative is based on the Securities and Exchange Commission's Whistleblower Incentive Program. It includes confidentiality assurances, anti-retaliation measures, and mandates for timely investigations and status updates for whistleblowers. The program does not request new funding, with residual fines directed to the Treasury.
Click HERE to read the full bill text.
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