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Williams Mullen

On January 6, 2020 the Bureau of Industry and Security (“BIS”) within the Commerce Department adopted export licensing requirements on certain artificial intelligence software used to automate the analysis of geospatial imaging.

Geospatial software can be used to process, analyze and visualize satellite imagery and other types of geospatial information, and artificial intelligence software is increasingly being used for change detection and the classification and identification of objects in geospatial images.

for training a Deep Convolutional Neural Network to automate the analysis of geospatial imagery and point clouds, and having all of the following: Technical Note: A point cloud is a collection of data points defined by a given coordinate system.

In addition, licenses will be required to disclose the software to foreign persons[1]in the U.S., including foreign persons who are employees working in your company (and including foreign person employees who were involved in developing the software).[2] BIS classified the software under ECCN 0Y521 based on a determination that the item warrants control because it provides a “significant military or intelligence advantage”

Licenses will be considered under a case-by-case review policy, and the only license exception available for these items at this time is for exports, reexports, and retransfers made by or consigned to a department or agency of the U.S. Government within the scope of EAR §

Regardless of the legal authority, however, it is highly likely that geospatial imagery software is just the first of a large number of technologies that will become subject to increased export controls within the coming months.

U.S. Department of Commerce Imposes Immediate Export Controls on Artificial Intelligence Software Used to Automatically Detect and Identify Objects Remotely

On January 6, 2020, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) published an interim final rule amending the Export Administration Regulations (EAR) to place new restrictions on the export of certain software specially designed for automating the analysis of geospatial imagery and collections of data points.

This new rule sheds light on U.S. government concerns regarding the application of artificial intelligence (AI) to the analysis of increasingly available, large geospatial data sets, and the specific role it can play in remotely detecting and identifying objects of interest for military and intelligence purposes.

it applies only to software that uses neural networks (a subset of AI) to detect and identify objects of interest (such as vehicles or houses) in geospatial imagery or “point clouds”

In addition to broader concerns about the transfer of advanced technology to non-allied countries, BIS’s decision to focus on this specific type of software is likely based on the significant national security implications associated with the ability to remotely and rapidly detect, identify, and respond to threats, and to collect other key intelligence information.

series, which enables BIS to place controls on previously uncontrolled items with immediate effect where the U.S. government determines that the items might provide a significant military or intelligence advantage to the United States.[1] BIS may use the 0Y521-series authorization to implement additional export controls without undergoing the notice and comment process typically required for federal rulemaking.

Thus, a foreign person investing in a U.S. business that designs or produces software covered by the new rule will also need to evaluate whether the investment triggers a mandatory filing under the CFIUS pilot program regulations or otherwise implicates increased risk of CFIUS scrutiny of the investment.

Provides a graphical user interface that enables the user to identify objects (e.g., vehicles, houses, etc.) from within geospatial imagery and point clouds in order to extract positive and negative samples of an object of interest;

Because the subject technology has previously not been controlled, comments from U.S. companies, industry organizations, and subject matter experts are important to aid BIS in its implementation of these controls on AI and, eventually, on additional emerging and foundational technologies.

to several dozen or more convolution layers, and deep learning refers to methodologies for training these systems to automatically learn their functional parameters using data representative of a specific problem domain of interest.”

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