On Friday, October 7, 2022, the Bureau of Industry and Security (BIS) released an interim final rule containing an unprecedented set of export controls aimed at the Chinese semiconductor, advanced computing, and supercomputer industries. This new rule aligns with the recent Executive Order for Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act of 2022, to make transformative investments to restore and advance U.S. leadership in the research, development, and manufacturing of semiconductors.
Summary
- New and Revised Export Control Classification Numbers and Export Licensing Requirements
- New and Expanded Foreign Direct Product Rules (FDPRs)
- End-user/End-Use Controls
- Restrictions on US Persons Activities
(1) New and Revised Export Control Classification Numbers (ECCNs) Requiring an Export License to China
New ECCNs
- 3A090 controls certain high-performance Integrated Circuits (ICs)
- 3B090 controls certain semiconductor manufacturing equipment and specially designed parts, components and accessories therefore.
- 4A090 controls computers, “electronic assemblies,” and “components” that contain ICs that exceed the limits in 3A090.a
- 4D090 controls “software” “specially designed” or modified for the “development1” or “production2,” of ECCN 4A090 computers, assemblies and components.
The associated technology and software for the above ECCNs, and others directly listed below that now meet or exceed the performance levels of these new ECCNs are controlled to China and require an export license. These are:
- Technology in 3E001 associated with 3A090 or 3B090
- Technology in 4E001 associated with 4A090 or 4D090
- 5A992 items that meet or exceed the performance levels of 3A090 or 4A090
- 5D992 items that meet or exceed the performance levels of 3A090 or 4A090
Revised ECCNs
- 3A991.p – revised to add .p for ICs that have either meet :
- p.1. A processing performance of 8 TOPS or more; or
- p.2. An aggregate bidirectional transfer rate over all inputs and outputs of 150 Gbyte/s or more to or from integrated circuits other than volatile memories.
- 4A994.l – revised to add .l for computers, electronic assemblies, and components that contain ICs that exceed the limit in new ECCN 3A991.p
Please note that the new license requirements do not apply to “deemed3” exports or “deemed” reexports4. Therefore, a license is not required for the release or disclosure of controlled technology to Chinese persons located outside of China (i.e. United States).
(2) New and Expanded Foreign Direct Product Rules (FDPRs)
The FDPRs are intended to capture items manufactured outside of the United States that are produced using certain U.S. technology.
Entity List FDPR
The Export Administration Regulations (EAR) already prohibited the transfer of all items “subject to the EAR” to entities identified in Footnote 4 of the FDPRs. With this amendment, the EAR also prohibits the transfer of non-U.S. made items that are:
- a “direct product” of “technology” or “software” classified as ECCNs: 3D001, 3D991, 3E001, 3E002, 3E003, 3E991, 4D001, 4D993, 4D994, 4E001, 4E992, 4E993, 5D001, 5D002, 5D991, 5E001, 5E002 or 5E991
- produced by any plant or “major component” of a plant when the plant or “major component” of a plant itself is a “direct product” of U.S.-origin “technology” or “software” specified in the ECCNs above.
Advanced Computing FDPR – Applies if the individual or entity has “knowledge” that the foreign-produced item is:
1) destined for China or will be incorporated into any “part,” “component,” “computer” or “equipment” not designated EAR99 that is destined to China or
2) technology developed by an entity headquartered in China for the “production” of a mask or an IC wafer or die. Further, the foreign-produced item must be either:
- the “direct product” of “technology” or “software” subject to the EAR and specified in 3D001, 3D991, 3E001, 3E002, 3E003, 3E991, 4D001, 4D090, 4D993, 4D994, 4E001, 4E992, 4E993, 5D001, 5D002, 5D991, 5E001, 5E991 or 5E002 and
- the foreign-produced item is specified in ECCN 3A090, 3E001 (for 3A090), 4A090 or 4E001 (for 4A090) or
- the foreign-produced item is an IC, computer, “electronic assembly” or “component” specified elsewhere on the Commerce Control List (CCL) and meets the performance parameters of ECCN 3A090 or 4A090
- produced by any plant or “major component” of a plant that is located outside the United States, when the plant or “major component” of a plant, whether made in the United States or a foreign country, itself is a “direct product” of U.S.-origin “technology” or “software” that meets the requirements discussed immediately above
Supercomputer FDPR – Expands the scope of the EAR to certain items destined for China whenever the exporter has “knowledge5” that the foreign-produced item will be:
1) used in the design, “development,” “production,” operation, installation (including on-site installation), maintenance (checking), repair, overhaul or refurbishing of a “supercomputer6” located in or destined to China or
2) incorporated into or used in the “development” or “production” of any “part,” “component” or “equipment” that will be used in a “supercomputer” located in or destined to China.
Further, the foreign-produced item must be either:
- the “direct product” of “technology” or “software” subject to the EAR and specified in ECCNs 3D001, 3D991, 3E001, 3E002, 3E003, 3E991, 4D001, 4D993, 4D994, 4E001, 4E992, 4E993, 5D001, 5D991, 5E001, 5E991, 5D002 or 5E002
- produced by any plant or “major component” of a plant that is located outside the United States, when the plant or “major component” of a plant, whether made in the United States or a foreign country, itself is a “direct product” of U.S.-origin “technology” or “software” that is specified in the ECCNs 3D001, 3D991, 3E001, 3E002, 3E003, 3E991, 4D001, 4D994, 4E001, 4E992, 4E993, 5D001, 5D991, 5E001, 5E991, 5D002 or 5E002.
(3) End-user/End-Use Controls
A license requirement on export, reexport, and in-country transfer of specified items for certain supercomputer and semiconductor-related development, manufacturing, and repair activities in or for China.
(4) Restrictions on US Person Activities
In a broad expansion with sanctions-like restrictions, U.S. persons are prohibited from engaging in certain activities, even when the items are not subject to the EAR (e.g., non-U.S. origin items). Accordingly, BIS will require a U.S. person to obtain a license to engage in (or facilitate) shipping, transmitting, transferring or servicing:
- items not subject to the EAR that the individual or company knows will be used in the “development” or “production” of ICs at a semiconductor fabrication “facility” located in China that fabricates certain ICs, including advanced logic ICs, NAND memory ICs or DRAM ICs;
- items not subject to the EAR and meeting the parameters of any ECCN in Product Groups B, C, D or E in Category 3 of the CCL that the individual or company knows will be used in the “development” or “production” of integrated circuits at any semiconductor fabrication “facility” located in China, for which the individual or company does not know whether such semiconductor fabrication “facility” fabricates certain ICs, including advanced logic ICs, NAND memory ICs or DRAM ICs; and
- items not subject to the EAR but meeting the parameters of ECCN 3B090, 3D001 (for 3B090) or 3E001 (for 3B090) regardless of end use or end user.
What does this mean for Berkeley Lab?
- Continue to conduct restricted party screening, monitor dynamic alerts and escalate any positive restricted party screening matches needing assistance to resolve to exportcontrol@lbl.gov.
- Contact us prior to:
- transferring or shipping semiconductor, advanced computing or supercomputing related items to China or other foreign destinations.
- Prior to procuring semiconductor, advanced computing or supercomputing items from China or from others with a Chinese nexus.
We kindly ask that you share this communication with others in your Divisions that may be impacted by these changes.
1 “Development” is related to all stages prior to serial production, such as: design, design research, design analyses, design concepts, assembly and testing of prototypes, pilot production schemes, design data, process of transforming design data into a product, configuration design, integration design, layouts.
2 “Production” means all production stages, such as: product engineering, manufacture, integration, assembly (mounting), inspection, testing, quality assurance.
3 Any release in the United States of “technology” or source code to a foreign person is a deemed export to the foreign person’s most recent country of citizenship or permanent residency.
4 Any release outside of the United States of “technology” or source code subject to the EAR to a foreign person of another country is a deemed reexport to the foreign person’s most recent country of citizenship or permanent residency, except as described in § 734.20.
5 Knowledge of a circumstance (the term may be a variant, such as “know,” “reason to know,” or “reason to believe”) includes not only positive knowledge that the circumstance exists or is substantially certain to occur, but also an awareness of a high probability of its existence or future occurrence. Such awareness is inferred from evidence of the conscious disregard of facts known to a person and is also inferred from a person’s willful avoidance of facts. This definition does not apply to part 760 of the EAR (Restrictive Trade Practices or Boycotts).
6 “Supercomputer” is defined as “A computing ‘system’ having a collective maximum theoretical computer capacity of 1090 or more double-precision (64-bit) petaflop or 200 or more single-precision (32-bit) petaflops within a 41600 cubic feet or smaller envelope.”