Every month we post the highlights of FCC’s Export/Import Daily Update (“The Daily Bugle”). The Daily Bugle is sent out every business day to approximately 10,000 readers, who keep up to date with changes in defense and high-tech trade laws and regulations. It is a free daily newsletter from Full Circle Compliance, edited by James E. Bartlett III and Elina Tsapouri.
We check the following sources daily: Federal Register, Congressional Record, Commerce/AES, Commerce/BIS, DHS/CBP, DOE/NRC, DOJ/ATF, DoD/DSS, DoD/DTSA, FAR/DFARS, State/DDTC, Treasury/OFAC, White House, and similar websites of European Union, Australia, Canada, U.K., and other countries and international organizations. Due to space limitations, we do not post Arms Sales notifications, Denied Party listings, or Customs AD/CVD items. To subscribe, click here.
Last month’s highlights of The Daily Bugle included in this edition are:
- Treasury/OFAC Amends Libyan Sanctions Regulations; Monday, 3 Oct 2022; Item #1
- Commerce/BIS Amends EAR Supp. No. 2 to Part 766, Guidance on Penalties for Antiboycott Violations; Friday, 7 Oct 2022; Item #1
- Commerce/BIS Implements New Export Controls on Advanced Computing and Semiconductor Manufacturing Items to the People’s Republic of China (PRC)”; Tuesday, 11 Oct 2022; Item #4
- Executive Office of the President: “Continuation of the National Emergency With Respect to the Situation in and in Relation to Syria”; Thursday, 13 Oct 2022; Item #4
- EU Council: “Chemical Weapons: EU Sanctions Renewed for a Year”; Friday, 14 Oct 2022; Item #5
- Treasury-Commerce-State Alert: “Impact of Sanctions and Export Controls on Russia’s Military-Industrial Complex”; Monday, 17 Oct 2022; Item #5
- DHS/CBP: Modernization of the Customs Broker Regulations; Tuesday, 18 Oct 2022; Item #3
- UK ECJU: “Export Control Joint Unit Has Amended the Export Control Order 2008”; Wednesday, 19 Oct 2022; Item #13
- DHS/CBP: “Changes to 19 CFR 111: National Permit Transition Process”; Thursday, 20 Oct 2022; Item #7
- DOD Releases National Defense Strategy; Friday, 28 Oct 2022; Item #4
Treasury/OFAC Amends Libyan Sanctions Regulations
(Source: Today’s Federal Register, 87 FR 59675, 3 Oct 2022) [Excerpts]
* AGENCY: Office of Foreign Assets Control, Treasury.
* ACTION: Final rule.
* SUMMARY: The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is amending the Libyan Sanctions Regulations and reissuing them in their entirety to further implement a 25 Feb 2011, Libya-related Executive order and to implement a 29 Apr 2016 Libya-related Executive order. This final rule replaces the regulations that were published in abbreviated form on July 1, 2011, and includes additional interpretive guidance and definitions, general licenses, and other regulatory provisions that will provide further guidance to the public. Due to the number of regulatory sections being updated or added, OFAC is reissuing the Libyan Sanctions Regulations in their entirety.
* DATES: This rule is effective October 3, 2022.
Commerce/BIS Amends EAR Supp. No. 2 to Part 766, Guidance on Penalties for Antiboycott Violations
(Source: 87 FR 60890, date 2022) [Excerpts]
* AGENCY: Commerce/BIS
* ACTION: Final Rule
* SUMMARY: In this final rule, the Bureau of Industry and Security (BIS) amends a supplement to the Export Administration Regulations (EAR) that sets forth guidance regarding BIS’s penalty determinations in the settlement of administrative enforcement cases involving violations of the antiboycott provisions of the EAR. This amendment clarifies and realigns such guidance with current boycott-related activity and BIS’s priorities and charging practices. BIS also updates the reference to the statutory authority for the EAR’s antiboycott provisions.
* DATES: This rule is effective 7 Oct 2022.
Commerce/BIS Implements New Export Controls on Advanced Computing and Semiconductor Manufacturing Items to the People’s Republic of China (PRC)
The Department of Commerce’s Bureau of Industry and Security (BIS) is implementing a series of targeted updates to its export controls as part of BIS’s ongoing efforts to protect U.S. national security and foreign policy interests.
The export controls announced in the two rules today restrict the PRC’s ability to obtain advanced computing chips, develop and maintain supercomputers, and manufacture advanced semiconductors. These items and capabilities are used by the PRC to produce advanced military systems including weapons of mass destruction; improve the speed and accuracy of its military decision making, planning, and logistics, as well as of its autonomous military systems; and commit human rights abuses. Finally, these rules make clear that foreign government actions that prevent BIS from making compliance determinations will impact a company’s access to U.S. technology through addition to the Entity List. . . .
These updates will restrict the People’s Republic of China’s (PRC’s) ability to both purchase and manufacture certain high-end chips used in military applications and build on prior policies, company-specific actions, and less public regulatory, legal, and enforcement actions taken by BIS. . . .
The Department of Commerce briefed and consulted with close allies and partners on these controls. The Department will work closely with industry as we implement all elements of the Administration’s semiconductor agenda, to include ensuring compliance with these measures. Summaries of the rules released today and relevant links to the rule text are provided below, along with additional background on BIS’s ongoing work to update its approach to export controls related to the PRC.
Implementing Controls Related to Advanced Computing and Semiconductor Manufacturing:
BIS’s rule on advanced computing and semiconductor manufacturing addresses U.S. national security and foreign policy concerns in two key areas. First, the rule imposes restrictive export controls on certain advanced computing semiconductor chips, transactions for supercomputer end-uses, and transactions involving certain entities on the Entity List. Second, the rule imposes new controls on certain semiconductor manufacturing items and on transactions for certain integrated circuit (IC) end uses.
Specifically, the rule:
1) Adds certain advanced and high-performance computing chips and computer commodities that contain such chips to the Commerce Control List (CCL);
2) Adds new license requirements for items destined for a supercomputer or semiconductor development or production end use in the PRC;
3) Expands the scope of the Export Administration Regulations (EAR) over certain foreign-produced advanced computing items and foreign produced items for supercomputer end uses;
4) Expands the scope of foreign-produced items subject to license requirements to twenty-eight existing entities on the Entity List that are located in the PRC;
5) Adds certain semiconductor manufacturing equipment and related items to the CCL;
6) Adds new license requirements for items destined to a semiconductor fabrication “facility” in the PRC that fabricates ICs meeting specified. Licenses for facilities owned by PRC entities will face a “presumption of denial,” and facilities owned by multinationals will be decided on a case-by-case basis. The relevant thresholds are as follows:
- Logic chips with non-planar transistor architectures (I.e., FinFET or GAAFET) of 16nm or 14nm, or below;
- DRAM memory chips of 18nm half-pitch or less;
- NAND flash memory chips with 128 layers or more.
7) Restricts the ability of U.S. persons to support the development, or production, of ICs at certain PRC-located semiconductor fabrication “facilities” without a license;
8) Adds new license requirements to export items to develop or produce semiconductor manufacturing equipment and related items; and
9) Establishes a Temporary General License (TGL) to minimize the short-term impact on the semiconductor supply chain by allowing specific, limited manufacturing activities related to items destined for use outside the PRC.
The rule is effective in phases after being filed for Public Inspection with the Federal Register. The semiconductor manufacturing items restrictions are effective upon filing for Public Inspection (October 7, 2022), the restrictions on U.S. persons’ ability to support the development, production, or use of ICs at certain PRC-located semiconductor fabrication “facilities” is effective five days later (October 12, 2022), and the advanced computing and supercomputer controls, as well as the other changes in the rule, are effective 14 days later (October 21, 2022). Additionally, public comments on all of these changes are due to BIS no later than 60 days from the date of Federal Register publication. The text of the rule is available on the Federal Register’s website here.
Revisions to BIS’s Unverified List:
BIS is also updating its regulations related to BIS’s Entity List to clarify that a sustained lack of cooperation by the host government that effectively prevents BIS from determining compliance with the EAR may lead to the addition of an entity to the Entity List.
The rule provides an example that stipulates that sustained lack of cooperation by a foreign government that prevents BIS from verifying the bona fides of companies on the Unverified List (UVL) can result in those parties being moved to the Entity List, if an end-use check is not timely scheduled and completed. All additions, removals, or revisions to the Entity List are still subject to the approval of the End-User Review Committee, which is made up of the Departments of Commerce, State, Defense, and Energy pursuant to existing rules.
The rule adds 31 new entities to the UVL and removes 9 entities that have met relevant requirements.
Consistent with this regulatory change, Export Enforcement has issued a policy memorandum Addressing Foreign Government Prevention of End-Use Checks. The memo is available online here. The policy calls for adding parties to the Unverified List 60 days after checks are requested but host government inaction prevents their completion, and an additional 60-day process for adding UVL parties to the Entity List when there is a sustained lack of cooperation by a host government to facilitate completion of the checks.
Text of the rule, which includes the list of parties added and removed, is available on the Federal Register’s website here. The rule takes effect on October 7, 2022.
The rules announced today are part of the ongoing review of BIS’s export control policies towards the PRC announced by Under Secretary Estevez during Congressional hearings in July 2022 and follow several regulatory and enforcement actions taken over the past few months including:
- A series of company-specific restrictions placed in recent months on the trade and servicing of specific advanced integrated circuits essential for highly capable artificial intelligence applications.
- Implementation of new multilateral controls on advanced semiconductor and gas turbine engine technologies.
- Utilizing the Entity List vigorously to address national security and foreign policy concerns, including adding seven PRC entities in the space, aerospace, and related technology sectors .
- Employing administrative and criminal enforcement authorities, including to address illegal military technology exports to the PRC.
BIS’s actions today were taken under the authority of the Export Control Reform Act of 2018 and its implementing regulations, the EAR. Under these authorities, BIS possesses a variety of tools to control the export of U.S.-origin and certain foreign-produced commodities, software, and technology as well as specific activities of U.S. persons, for national security and foreign policy reasons. These tools include issuing federal regulations, as well as using the licensing and regulatory process to take party-specific actions.
Executive Office of the President: “Continuation of the National Emergency With Respect to the Situation in and in Relation to Syria”
(Source: Today’s Federal Register, 87 FR 62281, 13 Oct 2022) [Excerpts]
On October 14, 2019, by Executive Order 13894, the President declared a national emergency pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States constituted by the situation in and in relation to Syria.
The situation in and in relation to Syria, and in particular the actions by the Government of Turkey to conduct a military offensive into northeast Syria, undermines the campaign to defeat the Islamic State of Iraq and Syria, or ISIS, endangers civilians, and further threatens to undermine the peace, security, and stability in the region, and continues to pose an unusual and extraordinary threat to the national security and foreign policy of the United States. For this reason, the national emergency declared in Executive Order 13894 of October 14, 2019, must continue in effect beyond October 14, 2022. Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), I am continuing for 1 year the national emergency declared in Executive Order 13894 with respect to the situation in and in relation to Syria.
This notice shall be published in the Federal Register and transmitted to the Congress.
EU Council: “Chemical Weapons: EU Sanctions Renewed for a Year”
(Source: EU Council, 13 Oct 2022) [Excerpts]
The Council has prolonged the restrictive measures against the proliferation and use of chemical weapons for another year, until 16 October 2023.
The restrictive measures currently in place target a total of 15 persons and 2 entities. Those designated are subject to an asset freeze and EU citizens and companies are forbidden from making funds available to them. Natural persons are additionally subject to a travel ban, which prevents them from entering or transiting through EU territories.
The EU sanctions regime aims to contribute to the EU’s efforts to counter the proliferation and use of chemical weapons, as well as support the Convention on the Prohibition of the Development, Production, Stockpiling and Use of Chemical Weapons and on their Destruction (CWC).
Treasury-Commerce-State Alert: “Impact of Sanctions and Export Controls on Russia’s Military-Industrial Complex”
(Source: Treasury, 14 Oct 2022)
Overview: Since Russia’s unjustified and unprovoked invasion of Ukraine in February 2022, the United States has worked with allies and partners around the world to impose costs on Russia for its war of aggression. The Department of the Treasury’s Ofice of Foreign Assets Control (OFAC), the Department of Commerce’s Bureau of Industry and Security (BIS), and the Department of State are issuing this alert to inform the public of the impact of sanctions and export control restrictions targeting Russia’s defense capabilities and warn of the risks of supporting Russia’s military-industrial complex.
Summary of actions taken in response to Russia’s unjust war: In response to Russia’s attack on Ukraine, OFAC, BIS, and the Department of State, along with our foreign partners, have imposed an unprecedented range of sanctions and export controls.
Strategic Intent and Impact of Our Actions:
The strategic intent of our actions is to degrade Russia’s ability to wage its unjust war against Ukraine and prevent Russia from projecting military force beyond its borders.
Sanctions and export controls are having significant and long-lasting consequences on Russia’s defense industrial base, which relies extensively on foreign-sourced items. By restricting Russia’s access to advanced goods, technology and services, the United States and our allies have degraded the Russian defense industry’s ability to replace weapons destroyed in the war, including over 6,000 pieces of military equipment, such as tanks, armored personnel carriers, and infantry fighting vehicles. For example, one of Russia’s major tank producers, Uralvagonzavod, was reported to be due to a lack of foreign components and has had to furlough employees. Major supply shortages for Russian forces in Ukraine, in part because of sanctions and export controls, are forcing Russia to turn to less technologically advanced countries like Iran and North Korea for supplies and equipment.
Russia’s defense industry is reliant on imported microelectronics. Since imposition of U.S. and allied restrictions, semiconductor imports from all global sources, the lifeblood of Russia’s weaponry, have dropped on a sustained basis over time of approximately 70 percent. Russian hypersonic ballistic missile production has nearly ceased due to the lack of necessary semiconductors used
in the manufacturing process. The production of cars fell by three-quarters compared to last year, indicating that critical advanced microchips for civilian vehicles are being redirected for military use.
The Russian military is reportedly cannibalizing chips from dishwashers and refrigerators to fix their military hardware, because they have run out of semiconductors. Russia’s military aviation program no longer benefits from the revenue and resupply provided by aviation trade. Russian media reports that production of its next-generation airborne early warning and control (AEW&C) aircraft has stalled due to lack of foreign components, including semiconductors. Mechanical plants, including those producing surface-to-air missiles (SAMs), have been shut down. Russia has begun using Soviet-era defense stocks as its own companies are targeted by our measures.
As flagged in recent guidance , OFAC is also prepared to use its broad targeting authorities against non-U.S. persons that provide ammunition or other support to the Russian Federation’s military industrial complex, as well as private military companies (PMCs) or paramilitary groups participating in or otherwise supporting the Russian Federation’s unlawful and unjustified attack on Ukraine. OFAC will continue to target Russia’s efforts to resupply its weapons and sustain its war of aggression against Ukraine, including any foreign persons who assist the Russian Federation in those efforts.
While Russia has benefited from high energy prices and a store of foreign exchange reserves, the U.S. Government has worked with partners and allies to immobilize about $300 billion worth of assets of the Central Bank of the Russian Federation, limiting the central bank’s ability to aid the war effort and mitigate sanctions impacts. Sanctioned Russian oligarchs and financial institutions have been forced to divest from long- held assets outside Russia. Sanctions on Russia’s financial leadership have prompted banks in several countries to curtail ties with the Russian financial sector, for example by suspending use of Russia’s Mir payment system.
From a macroeconomic perspective, Putin’s war has resulted in a sharp economic contraction for Russia and will drag on Russia’s economy for years to come. The International Monetary Fund (IMF), World Bank, and Organisation for Economic Co-operation and Development (OECD) forecasters expect Russia’s economy to contract between 3.4 and 5.5 percent in 2022 and between 2.3 and 4.5 percent in 2023, roughly in line with private sector forecasts. Longer term, potential growth is expected to be very low, as Russia has shifted spending from investment to its military, lost access to key technologies, and diminished its human capital due to brain drain, while its companies have been severed from developed financial markets.
Amid the impact of sanctions, Putin’s choices, and the weak outlook, multinational corporations have fled Putin’s Russia. According to estimates, over 1,000 global companies have curtailed or suspended operations in Russia. Academic and private sector analysts have estimated that Russia’s imports from the rest of the world fell around 30% in the wake of Russia’s attack on Ukraine, and remain below levels observed prior to Putin’s invasion.
To overcome the impacts on its military supply chain and to illicitly procure foreign technology, Russia is attempting to evade U.S. and partner sanctions and export controls using a range of techniques, including front companies and fraudulent end-user licenses.
Existing sanctions authorities allow OFAC and the Department of State to impose sanctions on deceptive or structured transactions or dealings to circumvent any United States sanctions, as well as on persons that materially assist, sponsor, or provide financial, material, or technological support for, or goods or services to or in support of, sanctioned persons or sanctionable activities. OFAC and the Department of State have and will continue to use their authorities against persons inside and outside Russia that engage in sanctions evasion or circumvention.
For example, in March 2022, the Department of State designated a Russian defense-related firm, Radioavtomatika, due to its role as an entity specializing in the procurement of foreign items for Russia’s military and defense industry.
Since March, Radioavtomatika has attempted to leverage front companies and intermediaries in Uzbekistan, Armenia, and the People’s Republic of China to continue its importation of critical technologies. In June 2022, the Department of State designated an Uzbekistan-based entity that actively supported Radioavtomatika in its efforts to evade U.S. sanctions. In September 2022, OFAC designated individuals, front companies, and foreign intermediaries associated with a Radioavtomatika procurement network set up to procure foreign items for Russia’s defense industry. These designations should serve as a warning that those who support sanctioned Russian persons risk being sanctioned themselves.
Similarly, in June 2022, OFAC designated three Russian individuals and one entity based in Asia that were part of a covert procurement network linked to the Russian Federal Security Service (FSB). This FSB-linked network covertly procured U.S., Japanese, and European components for Russia’s defense- industrial base through various foreign countries and bank accounts.
To assist industry identifying export control evasion, in June 2022 the Financial Crimes Enforcement Network (FinCEN) and BIS issued a joint alert that provides financial institutions with an overview of BIS’s current export restrictions; a list of commodities of concern for possible export control evasion; and select transactional and behavioral red flags to assist financial institutions in identifying suspicious transactions relating to possible export control evasion.
For additional information about sanctions and export controls imposed in response to Russia’s unjust war against Ukraine, please visit OFAC’s website, BIS’s website or State’s page on Ukraine and Russia Sanctions.
DHS/CBP: Modernization of the Customs Broker Regulations
* AGENCY: U.S. Customs and Border Protection, Department of Homeland Security, Department of the Treasury.
* ACTION: Final rule.
* SUMMARY: This document adopts as final, with changes, proposed amendments to the U.S. Customs and Border Protection (CBP) regulations modernizing the customs broker regulations. CBP is transitioning all customs brokers to a single national permit and expanding the scope of the national permit authority to allow national permit holders to conduct any type of customs business throughout the customs territory of the United States.
To accomplish this, CBP is eliminating broker districts and district permits, which in turn removes the need for the maintenance of district offices, and district permit waivers. CBP is also updating, among other changes, the responsible supervision and control oversight framework, ensuring that customs business is conducted within the United States, and requiring that a customs broker have direct communication with an importer. These changes are designed to enable customs brokers to meet the challenges of the modern operating environment while maintaining a high level of service in customs business.
Further, CBP is increasing fees for the broker license application to recover some of the costs associated with the review of customs broker license applications and the necessary vetting of individuals and business entities ( i.e., partnerships, associations, and corporations). Additionally, CBP is announcing the deployment of a new online system, the eCBP Portal, for processing broker submissions and electronic payments. Lastly, CBP is publishing a concurrent final rule document to eliminate all references to customs broker district permit user fees ( see “Elimination of Customs Broker District Permit Fee” RIN 1515-AE43) to align with the changes made in this final rule document.
* DATES: This final rule is effective December 19, 2022.
* FURTHER INFORMATION: Melba Hubbard, Chief, Broker Management Branch, (202) 325-6986, firstname.lastname@example.org.
UK ECJU: “Export Control Joint Unit Has Amended the Export Control Order 2008”
(Source: UK ECJU, 18 Oct 2022)
Introduction. The Export Control Joint Unit (ECJU) has amended the Export Control Order 2008. There are changes to Schedule 2 (military goods, software and technology).
The new Order. The Export Control (Amendment) (No. 2) Order 2022 (SI 2022 No. 1042), comes into force on 3 November 2022. The Order implements changes to the list of defence-related products. These reflect changes to the Wassenaar Arrangement munitions list. The Order also implements changes to the European Common Military List, in accordance with the United Kingdom’s commitments under the Protocol on Ireland/Northern Ireland in the EU Withdrawal Agreement (“the NI Protocol”). These changes reflect recent amendments to Directive 2009/43/EC of 6 May 2009 made by Commission Delegated Directive (EU) 2021/1047 of 5 March 2021. The 2009 Directive, as amended, applies to and in the United Kingdom in respect of Northern Ireland by virtue of NI Protocol.
The Order also fixes minor drafting errors. Changes to Schedule 2 include amendments to definitions and to the control entries ML1, ML5, ML6, ML8, ML9, ML10, ML13, ML17, ML18 and ML21. ECJU will update the consolidated list of strategic military and dual-use items that require export authorisation in due course.
DHS/CBP: “Changes to 19 CFR 111: National Permit Transition Process”
As detailed in the two published Final Rules: Modernization of the Customs Broker Regulations (87 FR 63267) and Elimination of Customs Broker District Permit Fee (87 FR 63262), CBP is eliminating customs broker districts and transitioning all brokers to a single permit framework, or national permit, that operates at the national level within the customs territory of the United States.
U.S. Customs and Border Protection’s (CBP) Broker Management Officers (BMO) will facilitate this process and will transition the pool of approximately 370 brokers that currently transact customs business with ONLY a district permit to a national permit prior to the effective date of the Final Rules. CBP anticipates no lapse in active permits. Each broker transitioned will be notified when their ‘pending’ national permit has been created and given an opportunity to provide CBP with amended address and permit qualifier information. The transitioned national permits will be ‘active’ upon the Final Rule effective date.
A list of the brokers CBP is transitioning can be found on the Broker Management Branch (BMB) Customs Broker Modernization Regulations webpage. If your brokerage name is not on the list but you believe it should be included, please reach out to the BMO at the port through which your license was issued.
Customs brokers already operating with a national permit in place are not affected by this transition activity.
National permit applications will continue to be accepted and processed by the BMB until the effective date of the Final Rules. Upon effective date of the Final Rules national permit applications must be submitted to the processing Center through which the license was issued for processing.
More information is available on the Customs Broker Modernization Regulations webpage.
BMO contact information can be found at https://www.cbp.gov/trade/programs-administration/customs-brokers
Questions regarding this message should be sent to: Broker Management Branch, Office of Trade at email@example.com
DOD Releases National Defense Strategy
(Source: Secretary of Defense, 27 Oct 2022)
On October 27, 2022, the Department of Defense publicly released our unclassified National Defense Strategy (NDS), a Congressionally-mandated review. This strategy sets the strategic direction of the Department to support U.S. national security priorities, and flows directly from President Biden’s National Security Strategy. The National Defense Strategy includes the Nuclear Posture Review (NPR) and the Missile Defense Review (MDR).
The Nuclear Posture Review is a legislatively-mandated review that describes U.S. nuclear strategy, policy, posture, and forces. The Missile Defense Review is a review conducted pursuant to guidance from the President and the Secretary of Defense, while also addressing the legislative requirement to assess U.S. missile defense policy and strategy.
Statement of Lloyd J. Austin III, Secretary of Defense:
President Biden has stated that we are living in a “decisive decade,” one stamped by dramatic changes in geopolitics, technology, economics, and our environment. The defense strategy that the United States pursues will set the Department’s course for decades to come. The Department of Defense owes it to our All-Volunteer Force and the American people to provide a clear picture of the challenges we expect to face in the crucial years ahead—and we owe them a clear and rigorous strategy for advancing our defense and security goals.
The 2022 National Defense Strategy (NDS) details the Department’s path forward into that decisive decade—from helping to protect the American people, to promoting global security, to seizing new strategic opportunities, and to realizing and defending our democratic values.
For the first time, the Department conducted its strategic reviews—the NDS, the Nuclear Posture Review (NPR) and Missile Defense Review (MDR)—in an integrated way, ensuring tight linkages between our strategy and our resources. The NDS directs the Department to act urgently to sustain and strengthen U.S. deterrence, with the People’s Republic of China (PRC) as the pacing challenge for the Department.
The NDS further explains how we will collaborate with our NATO Allies and partners to reinforce robust deterrence in the face of Russian aggression while mitigating and protecting against threats from North Korea, Iran, violent extremist organizations, and transboundary challenges such as climate change. The PRC remains our most consequential strategic competitor for the coming decades.
I have reached this conclusion based on the PRC’s increasingly coercive actions to reshape the IndoPacific region and the international system to fit its authoritarian preferences, alongside a keen awareness of the PRC’s clearly stated intentions and the rapid modernization and expansion of its military.
As President Biden’s National Security Strategy notes, the PRC is “the only country with both the intent to reshape the international order, and, increasingly, the economic, diplomatic, military, and technological power to do so.” Meanwhile, Russia’s unprovoked, unjust, and reckless invasion of Ukraine underscores its irresponsible behavior. Efforts to respond to Russia’s assault on Ukraine also dramatically highlight the importance of a strategy that leverages the power of our values and our military might with that of our Allies and partners. Together, we have marshaled a strong, unified response to Russia’s attack and proven the strength of NATO unity.
In these times, business as usual at the Department is not acceptable. The 2022 NDS lays out our vision for focusing the Defense Department around our pacing challenge, even as we manage the other threats of our swiftly changing world. It builds on my 2021 Message to the Force, which stressed as core values defending the nation, taking care of our people, and succeeding through teamwork.
Our central charge is to develop, combine, and coordinate our strengths to maximum effect. This is the core of integrated deterrence, a centerpiece of the 2022 NDS. Integrated deterrence means using every tool at the Department’s disposal, in close collaboration with our counterparts across the U.S. Government and with Allies and partners, to ensure that potential foes understand the folly of aggression. The Department will align policies, investments, and activities to sustain and strengthen deterrence—tailored to specific competitors and challenges and coordinated and synchronized inside and outside the Department.
The Department will also campaign day-to-day to gain and sustain military advantages, counter acute forms of our competitors’ coercion, and complicate our competitors’ military preparations. Campaigning is not business as usual—it is the deliberate effort to synchronize the Department’s activities and investments to aggregate focus and resources to shift conditions in our favor. Through campaigning, the Department will focus on the most consequential competitor activities that, if left unaddressed, would endanger our military advantages now and in the future.
Even as we take these steps, we will act with urgency to build enduring advantages for the future Joint Force, undertaking reforms to accelerate force development, getting the technology we need more quickly, and making investments in the extraordinary people of the Department, who remain our most valuable resource.
America has never been afraid of competition, and we do not shy away from tough challenges, especially when it comes to securing our national interests and defending our national values. To meet this moment, we will tap into our core strengths: our dynamic, diverse, and innovative society; our unmatched network of Allies and partners; and the tremendous men and women of our armed forces.
We live in turbulent times. Yet, I am confident that the Department, along with our counterparts throughout the U.S. Government and our Allies and partners around the world, is well positioned to meet the challenges of this decisive decade.
Table of Contents:
II. SECURITY ENVIRONMENT
III. DEFENSE PRIORITIES
IV. INTEGRATED DETERRENCE
VI. ANCHORING OUR STRATEGY IN ALLIES AND PARTNERS AND ADVANCING REGIONAL GOALS
VII. FORCE PLANNING
VIII. BUILDING ENDURING ADVANTAGES
IX. RISK MANAGEMENT