The Bureau of Industry and Security should consider working with companies to help them carry out extra due diligence for certain chip exports and should introduce a notification requirement for exports of advanced AI chips, researchers said in a new report last week. Those and other recommendations could help BIS better prevent illegal chip smuggling, they said.
The Bureau of Industry and Security’s lack of an official replacement regulation for the Biden-era AI diffusion rule is causing significant uncertainty for companies working in the semiconductor sector, industry officials said this week. Although BIS has said it doesn’t plan to enforce the rule, at least one consultant said she’s not yet comfortable advising clients to ignore those restrictions.
The Bureau of Industry and Security's recently issued advanced chip guidance appears to raise compliance expectations for industry, especially for banks and forwarders that may be indirectly or inadvertently violating export controls on China, lawyers said.
At least three companies last week disclosed receiving letters from the Bureau of Industry and Security informing them of new license restrictions they must follow for certain exports to China, including two semiconductor design firms and one oil company.
The Bureau of Industry and Security officially announced this week that it plans to rescind the Biden administration’s AI diffusion export control rule and issue a “replacement rule in the future.” The agency also issued new guidance about how using Huawei Ascend chips and other Chinese chips likely violates U.S. export controls, published recommendations for companies to protect their supply chains against “diversion tactics,” and outlined the types of activities involving AI chips and AI models that may trigger a license requirement.
The State Department’s Directorate of Defense Trade Controls this month updated its list of commodity jurisdiction determinations for items and services controlled under the U.S. Munitions List. The new determinations cover certain amplifiers, drones, parts related to fuel tanks, freight advisory services, transceivers, helicopter training, engines and more. DDTC also said some of the items should be classified by the Bureau of Industry and Security under the Export Administration Regulations as EAR99 or other specific Export Control Classification Numbers.
The Census Bureau this week updated two license type codes in the Automated Export System to reflect which Export Control Classification Numbers can be used with those codes, which need to be reported for certain chip-related exports.
The Bureau of Industry and Security this week revoked the export privileges of a Kenya-based company and two people for trying to illegally export airplane parts from the U.S. to Russia, including by lying to American freight forwarders and other businesses about where the parts would be sent. It also warned that the company and people are continuing to try to illegally buy export controlled parts from American businesses.
Technology companies and industry groups mostly supported a January State Department rule that will add items to the U.S. Munitions List and remove other items that no longer warrant control (see 2501160027), although they said new restrictions around autonomous underwater vehicles, radar-related technology and more could cause unintended consequences.
The Bureau of Industry and Security is hoping to publish new guidance to clarify due diligence expectations for companies subject to the agency’s recent semiconductor-related export control rules, Commerce Department officials said this week. They also said the agency is hoping to expand its list of approved designers that will benefit from some licensing carve-outs for certain chip exports.