On October 7, 2022, the U.S. Department of Commerce Bureau of Industry and Security (BIS) announced new restrictions targeting advanced computing and semiconductor manufacturing. The interim final rule is part of the ongoing review of BIS’s export control policies toward China. According to BIS, in addition to trying to slow China’s nuclear and military capabilities, the U.S. is particularly concerned by the growing use of advanced artificial intelligence (AI) for military purposes and citizen surveillance, which is enabled by efficient processing of huge amounts of data.
In this interim final rule, BIS amended the Export Administration Regulations (EAR) to add additional items to the Commerce Control List, a license requirement for certain technology being exported from China, new end-use restrictions, new foreign direct product (FDP) rules extending U.S. jurisdiction over certain foreign-made items, and restrictions on specific U.S. person activities. While BIS has stressed that these restrictions are for high-end advanced integrated circuits and semiconductor manufacturing equipment and that these new rules are scoped narrowly to ensure “these actions will have the least possible impact on commercial activity,”1 several of the new restrictions apply even when only low-level technologies are involved, meaning the impact of the new restrictions will extend to companies not involved in the development of highly advanced integrated circuits.
The rule was implemented in phases, with some controls having become effective immediately on October 7, 2022, and others on October 12 and 21. BIS is accepting written comments on these interim rules until December 12, 2022. On October 13, BIS held a briefing discussing the goals of the new rule and providing a high-level overview of the actions taken. BIS disclosed that it had received over 150 questions and would be releasing FAQs on a rolling basis. On October 28, BIS released the first round of FAQs. With this most recent guidance from BIS, below are our key takeaways of the interim rule to date.
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