Rule2024-28270
Foreign-Produced Direct Product Rule Additions, and Refinements to Controls for Advanced Computing and Semiconductor Manufacturing Items
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Published
December 5, 2024
Effective
December 2, 2024
Issuing agencies
Commerce DepartmentIndustry and Security Bureau
Abstract
In this interim final rule (IFR), the Bureau of Industry and Security (BIS) makes changes to the Export Administration Regulations (EAR) controls for certain advanced computing items, supercomputers, and semiconductor manufacturing equipment, which includes adding new controls for certain semiconductor manufacturing equipment and related items, creating new Foreign Direct Product (FDP) rules for certain commodities to impair the capability to produce "advanced-node integrated circuits" ("advanced-node ICs") by certain destinations or entities of concern, adding new controls for certain high bandwidth memory important for advanced computing, and clarifying controls on certain software keys that allow for the use of items such as software tools. This IFR publishes concurrently with another BIS final rule entitled, "Additions and Modifications to the Entity List; and Removals from the Validated End-User (VEU) Program" (Entity List rule) that adds to and modifies the Entity List to ensure appropriate EAR controls are in place for certain critical technologies and to minimize the risk of diversion to entities of concern.
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[Federal Register Volume 89, Number 234 (Thursday, December 5, 2024)]
[Rules and Regulations]
[Pages 96790-96830]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-28270]
[[Page 96789]]
Vol. 89
Thursday,
No. 234
December 5, 2024
Part III
Department of Commerce
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Bureau of Industry and Security
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15 CFR Parts 732, 734, 736 et. al
Foreign-Produced Direct Product Rule Additions, and Refinements to
Controls for Advanced Computing and Semiconductor Manufacturing Items;
Additions and Modifications to the Entity List; Removals From the
Validated End-User (VEU) Program; Final Rules
Federal Register / Vol. 89 , No. 234 / Thursday, December 5, 2024 /
Rules and Regulations
[[Page 96790]]
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DEPARTMENT OF COMMERCE
Bureau of Industry and Security
15 CFR Parts 732, 734, 736, 740, 742, 744, 746, 758, 762, 772, and
774
[Docket No. 241126-0302]
RIN 0694-AJ74
Foreign-Produced Direct Product Rule Additions, and Refinements
to Controls for Advanced Computing and Semiconductor Manufacturing
Items
AGENCY: Bureau of Industry and Security, Commerce.
ACTION: Interim final rule.
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SUMMARY: In this interim final rule (IFR), the Bureau of Industry and
Security (BIS) makes changes to the Export Administration Regulations
(EAR) controls for certain advanced computing items, supercomputers,
and semiconductor manufacturing equipment, which includes adding new
controls for certain semiconductor manufacturing equipment and related
items, creating new Foreign Direct Product (FDP) rules for certain
commodities to impair the capability to produce ``advanced-node
integrated circuits'' (``advanced-node ICs'') by certain destinations
or entities of concern, adding new controls for certain high bandwidth
memory important for advanced computing, and clarifying controls on
certain software keys that allow for the use of items such as software
tools. This IFR publishes concurrently with another BIS final rule
entitled, ``Additions and Modifications to the Entity List; and
Removals from the Validated End-User (VEU) Program'' (Entity List rule)
that adds to and modifies the Entity List to ensure appropriate EAR
controls are in place for certain critical technologies and to minimize
the risk of diversion to entities of concern.
DATES:
Effective date: This rule is effective December 2, 2024.
Compliance dates: Although this rule is effective December 2, 2024,
exporters, reexporters, and transferors are not required to comply with
the changes made in the following amendatory instructions until the
compliance dates specified below for the respective amendatory
instructions. If no compliance date is provided, the parties must
comply with those requirements as of the effective date of this IFR.
<bullet> The changes made in this IFR in amendatory instructions 2
(Red Flags) and 6 (Sec. 734.19) have a compliance date of December 2,
2024.
<bullet> The changes made in this IFR in amendatory instructions 4,
5, 15, 16, 17, 19, 20, 21, 23, 25, 29, and 31 (ECCNs 3B001, 3B002,
3B991, 3B992, 3B993, 3B994, 3A090, 3D001 (related to 3A090.c and 3B
commodities), 3D002, 3D992, 3D993, 3D994, 3E001 (related to 3A090.c and
3B commodities) (HBM controls and related changes), 3E992, 3E993, and
3E994) FN5, and FDP rules, and related changes, and DRAM definition
changes) have a compliance date of December 31, 2024.
Comments due date: Comments must be received by BIS no later than
January 31, 2025.
ADDRESSES: Comments on this IFR may be submitted to the Federal
rulemaking portal at: <a href="http://www.regulations.gov">www.regulations.gov</a>. The <a href="http://regulations.gov">regulations.gov</a> ID for
this IFR is BIS-2024-0028. Please refer to RIN 0694-AJ74 in all
comments.
All filers using the portal should use the name of the person or
entity submitting the comments as the name of their files, in
accordance with the instructions below. Anyone submitting business
confidential information should clearly identify the business
confidential portion at the time of submission, file a statement
justifying nondisclosure and referring to the specific legal authority
claimed, and provide a non-confidential version of the submission.
For comments submitted electronically containing business
confidential information, the file name of the business confidential
version should begin with the characters ``BC.'' Any page containing
business confidential information must be clearly marked ``BUSINESS
CONFIDENTIAL'' on the top of that page. The corresponding non-
confidential version of those comments must be clearly marked
``PUBLIC.'' The file name of the non-confidential version should begin
with the character ``P.'' Any submissions with file names that do not
begin with either a ``BC'' or a ``P'' will be assumed to be public and
will be made publicly available at: <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
Commenters submitting business confidential information are encouraged
to scan a hard copy of the non-confidential version to create an image
of the file, rather than submitting a digital copy with redactions
applied, to avoid inadvertent redaction errors which could enable the
public to read business confidential information.
FOR FURTHER INFORMATION CONTACT:
<bullet> For general questions, contact Regulatory Policy Division,
Office of Exporter Services, Bureau of Industry and Security, U.S.
Department of Commerce at 202-482-2440 or by email: <a href="/cdn-cgi/l/email-protection#e1b3b1a5d3a1838892cf858e82cf868e97"><span class="__cf_email__" data-cfemail="8bd9dbcfb9cbe9e2f8a5efe4e8a5ece4fd">[email protected]</span></a>.
<bullet> For Category 3 technical questions, contact Carlos Monroy
at 202-482-3246 or by email: <a href="/cdn-cgi/l/email-protection#80c3e1f2eceff3aecdefeef2eff9c0e2e9f3aee4efe3aee7eff6"><span class="__cf_email__" data-cfemail="9eddffecf2f1edb0d3f1f0ecf1e7defcf7edb0faf1fdb0f9f1e8">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Background
A. BIS's Implementation of Export Controls To Address National Security
Risks and Foreign Policy Objectives Associated With the People's
Republic of China (PRC)'s Use of Advanced Computing, Supercomputer, and
Semiconductor Manufacturing
PRC leadership at the highest levels has stressed the importance of
building an indigenous and self-sufficient semiconductor ecosystem,
referring to ICs in particular as critical to PRC national security
strategy. Reporting from PRC state-owned media outlets has even
referred to integrated circuits (ICs) as the ``main battlefield'' of
the PRC's Military-Civil Fusion (MCF) National Strategy to eliminate
barriers between the PRC's civilian research and commercial sectors and
its military and defense industrial sectors to ensure that innovations
in the civilian sector simultaneously advance the PRC's military
capabilities. The Chinese Communist Party (CCP) aims to achieve a world
class military by 2049 through MCF. Due to the significance of
semiconductors to that strategy and the PRC's technology ambitions, PRC
political and scientific leaders have sought to develop an
``independent and controllable'' semiconductor industry for decades--
one that is fully within the government's control and not reliant on
foreign suppliers. The PRC has also mandated and incentivized relevant
domestic firms to dedicate significant resources to realizing these
strategic objectives, demonstrating the top-down, hands-on approach
that the PRC is taking to shape this ecosystem to benefit itself, with
a related detriment to the technology leadership of the United States
and its allies.
Export controls on semiconductor manufacturing equipment (SME) and
related parts and components are central to countering the PRC's goal
of furthering its ``advanced-node ICs'' production capacity in support
of its military modernization and weapons of mass destruction (WMD)
programs. Since October 2022, BIS has published a series of IFRs
imposing controls on advanced computing and supercomputing items and
SME, starting with an IFR that was issued on October 7, 2022,
``Implementation of Additional Export Controls: Certain Advanced
Computing and
[[Page 96791]]
Semiconductor Manufacturing Items; Supercomputer and Semiconductor End
Use; Entity List Modification'' (October 7 IFR) (87 FR 62186, October
13, 2022). The October 7 IFR amended the EAR to implement controls on
advanced computing ICs, computer commodities that contain such ICs, and
certain SME and parts and components needed to produce those and other
advanced ICs, and to make other EAR changes to implement appropriate
related controls, including on certain ``U.S. person'' activities that
`support' (as defined in Sec. 744.6 of the EAR) the ``development'' or
``production'' of certain ICs in the PRC.
The October 7 IFR explained that these controls were aimed at
limiting the PRC's ability to engage in activities that would pose
significant threats to U.S. national security and foreign policy.
Specifically, BIS determined that certain advanced computing ICs and
related computing items--many of which originated in the United States
or were produced with U.S. technology, software, or tools--could enable
the PRC to develop certain enhanced data processing and analysis
capabilities, including through AI applications because of the high
processing power of the advanced ICs and related computing items.
Additionally, BIS determined that the capability to produce advanced
computing ICs for advanced computing systems, such as AI systems,
through the use of certain SME, presented significant national security
and foreign policy concerns because indigenous production is another
means to obtain ``advanced computing ICs'' and other advanced computing
systems. These capabilities could be used by the PRC to further its
military modernization efforts, improve calculations in weapons design
and testing (including for WMD), and violate basic human rights through
comprehensive surveillance programs. As previously stated, these
activities are contrary to U.S. national security and foreign policy as
set forth in the Export Control Reform Act of 2018 (ECRA) (codified, as
amended, at 50 U.S.C. 4801-4852), which directs BIS to control items
subject to the jurisdiction of the United States when those items could
be used in ``military programs that pose a threat to the security of
the United States or its allies,'' could lead to ``the proliferation of
weapons of mass destruction or of conventional weapons,'' or could
undermine the ``foreign policy of the United States, including the
protection of human rights and the promotion of democracy'' (50 U.S.C.
4811(2)).
To effectuate its controls under the October 7 IFR--and,
consequently, to help reduce the risk that U.S. technology would
contribute to activities that threaten U.S. national security and
foreign policy--BIS added new Export Control Classification Numbers
(ECCNs) 3A090 (specified high-performance ICs), 4A090 (related
computing items), and 3B090 (specified SME essential to produce
``advanced-node ICs'').
Because many of the advanced computing ICs and related computing
items controlled by the October 7 IFR are produced by manufacturers
outside the United States relying on U.S. software, technology, or
tools, the October 7 IFR also imposed two additional foreign direct
product (FDP) rules. As a general matter, the EAR asserts jurisdiction
over certain foreign-produced items made with the use of U.S.
technology, software, or tools, as described under the various FDP
rules in Sec. 734.9 of the EAR. The FDP rules do not apply to all
items and end users. Instead, FDP rules are targeted to cover specific
combinations of items, destinations, end users, or end uses.
Accordingly, the October 7 IFR implemented two new FDP rules related to
advanced computing items and ``supercomputers'' to extend jurisdiction
over certain items produced in foreign countries and destined to the
PRC or certain entities in the PRC. BIS also expanded the scope of an
existing FDP rule that covers items destined for certain entities on
the Entity List.
In 2023, BIS issued two rules imposing additional controls on
advanced computing and semiconductor manufacturing items. In the IFR,
``Export Controls on Semiconductor Manufacturing Items'' (SME IFR) (88
FR 73424, October 25, 2023), BIS added controls for additional SME
essential to producing ``advanced-node ICs'' and required licenses for
such SME, as well as for SME previously controlled under ECCN 3B090
(now 3B001 and 3B002), when destined to Macau and Country Group D:5.
The same day it issued the SME IFR, BIS issued a second rule to address
advanced computing chips. The IFR, ``Implementation of Additional
Export Controls: Certain Advanced Computing Items; Supercomputer and
Semiconductor End Use; Updates and Corrections'' (AC/S IFR) (88 FR
73458, October 25, 2023), adjusted parameters for advanced computing
ICs that are critical for advanced computing and AI applications, and
imposed new measures to address the risk of circumvention of the
controls, including expanding the license requirement for advanced
computing ICs to apply to Country Groups D:1, D:4, and D:5.
Like the October 7 IFR, the SME IFR described the national security
rationale for expanding controls on SME. The SME IFR noted that the
controls protect U.S. national security by restricting the PRC's
military modernization efforts and degrading the PRC's ability to
violate human rights. The SME IFR further noted that the controlled SME
has profound implications for U.S. national security, including
production of the advanced computing ICs that could further development
of weapons of mass destruction and emerging technologies, such as
advanced artificial intelligence systems, autonomous weapons,
cyberweapons, hypersonics, and high-tech surveillance applications. The
PRC's statements and activities suggest it would use its next
generation military capabilities to engage in activities contrary to
U.S. and allied national security interests.
B. In Order Address the Continuing Threat Posed by the PRC's Efforts To
Acquire Advanced Computing Items, Supercomputing Items, and SME, This
IFR Imposes Additional Controls Related to Such Items
There is substantial open source and unclassified information
detailing the PRC's efforts to respond to the impact of current
restrictions on SME, including key parts and components, through
supporting semiconductor research and development, building additional
facilities as alternate suppliers to fabrication facilities, and
funding indigenous producers of SME.
As such, to address the continued threat from the PRC's efforts to
develop an ``independent and controllable'' semiconductor industry to
produce ``advanced-node ICs'' to help achieve a world-class military,
BIS is imposing additional controls on certain types of SME and related
items that are used to produce ``advanced-node ICs.'' BIS is also
establishing new foreign FDP controls for certain SME items that
originate in foreign countries but are produced with U.S. technology,
software, or tools, as well as SME items that contain essential
components, like ICs, that could not be produced without U.S.
technology, software, or tools. These changes, and the related national
security and foreign policy considerations, are described below under
sections III.A and III.B. The addition of new FDP rules also requires
certain additional revisions to parts 734 and 736, which are described
below under sections III.A.4 (regarding the FDP rules) and III.B.1
(regarding de minimis changes) of this preamble.
Additionally, BIS is imposing new controls on certain high-
bandwidth
[[Page 96792]]
memory (HBM) commodities that provide necessary memory capacity and
bandwidth needed for advanced artificial intelligence (AI) models and
supercomputing applications. Such applications can enable advanced
military and intelligence applications, lower the barriers to entry for
non-experts to develop WMD, support powerful offensive cyber
operations, and assist in using mass surveillance to commit human
rights abuses. In accordance with the policy goals described in Sec.
1752(1)(A) and (2)(D), imposing controls on certain HBM is necessary to
restrict items that can make a ``significant contribution to the
military potential of any other country'' and to ``carry out the
foreign policy of the United States, including the protection of human
rights.''
Finally, this IFR also adds new paragraph (b) to 734.19 to specify
that software keys, also called software license keys, which allow
users the ability to use ``software'' or hardware by providing access
to it, and software keys that renew existing ``software'' or hardware
use licenses, are classified and controlled under the same ECCNs on the
Commerce Control List (CCL) (15 CFR part 744) as the corresponding
``software'' or hardware to which they provide access, or in the case
of hardware, the software key would be classified under the
corresponding ECCN in the software group (e.g., a software license key
that allows the use of hardware classified under ECCN 5A992 would be
classified under ECCN 5D992). This clarification applies to, among
other items, software keys for electronic computer-aided design (ECAD)
tools that are important to the development and production of
``advanced-node ICs'' and thus can have a significant impact on
military programs posing a threat to the security of the United States
and its allies (see Sec. 1752(2)(A)(iv) of ECRA). Additionally, as
noted under Sec. 1752(7) of ECRA, administering export controls in an
effective manner ``requires a clear understanding both inside and
outside the U.S. Government of which items are controlled.'' This
clarification enhances the exporting community's understanding to
prevent unauthorized access to controlled ``software'' or hardware.
C. Additional Changes and Relation of This IFR With the Accompanying
BIS Rule, ``Additions and Modifications to the Entity List; and
Removals From the Validated End-User (VEU) Program.''
The controls implemented since October 2022 have also added or
expanded end-use controls under part 744 of the EAR. In particular, the
addition of Sec. 744.23 and the expansion of the ``U.S. person''
control under Sec. 744.6 have supplemented the CCL-based controls to
address the national security and foreign policy concerns with these
items. Public comments on both the SME and AC/S IFRs published since
October 2022 in this area have requested the U.S. Government to
publicly identify ``production'' ``facilities'' for ``advanced-node
ICs,'' or entities engaged in the indigenization of SME. In the SME IFR
and AC/S IFR, BIS noted its support of identifying such entities to
enhance compliance by exporters, reexporters, and transferors and to
improve the effectiveness of the controls.
Consequently, BIS is publishing concurrently with this IFR the
Entity List rule. The Entity List rule adds entities to the Entity List
because of specific national security or foreign policy concerns
regarding those entities, which are described in that rule. The
addition and modification of certain entities on the Entity List are
designed to impair their current or potential ``development'' or
``production'' of ``advanced-node ICs.'' The addition of other entities
on the Entity List are designed to impair their ability to produce SME
and related items. The Entity List rule publishes concurrently with
this IFR as part of the larger effort to ensure appropriate EAR
controls are in place on these items, including in connection with
transactions destined to, or otherwise involving, the entities being
added to the Entity List, as well as for existing entries on the Entity
List that this final rule modifies.
The Entity List rule publishing concurrently with this IFR adds
entities to the Entity List and modifies certain existing entries on
the Entity List. As part of that Entity List rule, BIS has included a
Footnote 5 (which extends EAR jurisdiction to certain foreign-produced
items pursuant to Sec. 734.9(e)(3)) designation for certain entities
being added to the Entity List and to certain entities already on the
Entity List. While the Entity List rule adds Footnote 5 designations to
specific entities, this IFR adds FDP rules, license requirements,
license exceptions, and Temporary General Licenses (TGLs) that pertain
to exports, exports from abroad, reexports, and transfers (in-country)
when these entities are involved in the transaction. See the Entity
List rule publishing concurrently with this IFR for an identification
of which new and modified entities on the Entity List will receive a
Footnote 5 designation.
As BIS identifies additional entities that warrant being subject to
these controls, they will be added to the Entity List. However,
exporters, reexporters, and transferors must continue to conduct due
diligence, including by reviewing transactions for Red Flags (i.e.,
circumstances in a transaction that indicate that the export may be
destined for an inappropriate end use, end user, or destination). To
assist parties in identifying Red Flags, this IFR adds eight new Red
Flags to supplement no. 3 to part 732. The Red Flags are discussed in
section III.C.5 of this preamble.
The controls implemented since October 2022 are calibrated to
impact ``advanced-node IC'' production (and related development)
activities without significantly impacting global commercial supply
chains. However, calibrated controls by their nature tend to be more
complex than broader controls. BIS has evaluated the effectiveness of
these controls and has identified revisions to enhance clarity and to
ensure the controls are effectively addressing national security and
foreign policy concerns. BIS is still in the process of reviewing and
responding to the comments received on the SME IFR and AC/S IFR, as
well as comments on another IFR, ``Implementation of Additional Export
Controls: Certain Advanced Computing Items; Supercomputer and
Semiconductor End Use; Updates and Corrections; and Export Controls on
Semiconductor Manufacturing Items; Corrections and Clarifications''
(April 4 IFR) (88 FR 23876, April 4, 2024). However, at this time, BIS
has identified additional changes that will be implemented in this IFR.
BIS is soliciting comments on these changes and will address any such
comments along with comments on the three earlier IFRs as needed in a
subsequent rule.
The controls enacted by this IFR, as described in section III
below, are consistent with ECRA. The underlying purpose of ECRA
encompasses restricting the products of U.S. ``technology,''
``software,'' and ``commodities'' that could be used to undermine U.S.
national security and foreign policy. As explained above, the PRC's
goal of achieving a world class military by 2049 is a critical concern
to U.S. national security and foreign policy. ECRA provides that the
policy of the United States is ``to restrict the export of items which
would make a significant contribution to the military potential of any
other country or combination of countries which would prove detrimental
to the national security of the United States; and to restrict the
export of items if necessary to further significantly the foreign
[[Page 96793]]
policy of the United States . . .'' (50 U.S.C. 4811(1)). Because the
development of a PRC ``independent and controllable'' semiconductor
industry is a critical factor in the PRC's ability to achieve its goal,
ECRA authorizes the implementation of sufficient controls to prevent
the PRC's possession of sensitive items and is necessary to advance the
U.S. national security and foreign policy interests.
II. Overview of This Interim Final Rule
In this IFR, BIS makes changes to EAR controls for advanced
computing items, supercomputers, and SME. The five categories of
changes implemented by this IFR are described in section III as
follows:
A. Addition of two new FDP rules in Sec. 734.9 of the EAR for
certain types of advanced SME and for entities on the Entity List
involved in the production of ``advanced-node ICs'';
B. Additional revisions related to the production of semiconductors
and other conforming changes, including revisions to de minimis
provisions that correlate to the new FDP rules, establishment of new
License Exception Restricted Fabrication ``Facility'' (RFF), addition
of eight new Red Flags, clarifications to Sec. 744.23, and revisions
and conforming changes to other parts of the EAR;
C. Addition of HBM controls, including addition of new ECCN 3A090.c
and License Exceptions HBM;
D. Clarification to software keys to address when authorization is
required; and
E. Revisions to the CCL in supplement no. 1 to part 774, including
revisions to eight existing ECCNs and addition of eight new ECCNs.
III. Changes to the EAR
A. Addition of Two New Foreign Direct Product Rules Related to the
Production of ``Advanced-Node ICs''
1. National Security and Foreign Policy Considerations for New FDP Rule
for Entities on the Entity List Involved in the Production of
``Advanced-Node ICs'' in Countries of Concern
This IFR implements a new FDP rule for certain SME that are
essential to, or support, producing ``advanced-node ICs,'' which have
important military applications (SME FDP). This interim final rule also
implements a new FDP rule for entities on the Entity List designated
with new Footnote 5 (FN5 FDP). The entities added to the Entity List
with a Footnote 5 designation are being added because of specific
national security or foreign policy concerns described in the Entity
List rule, including supporting, or having the potential to support,
the PRC's efforts to develop and produce ``advanced-node ICs,''
including for military end uses.
As explained in the October 7 IFR, the SME IFR, and above in this
IFR, the capability to produce ``advanced-node ICs'' is a force-
multiplying technology that has critical implications for national
security and foreign policy. SME is needed to produce ``advanced-node
ICs,'' and the ability to produce ``advanced-node ICs'' has impacts
across various technology ecosystems critical to national security. For
example, ``advanced-node ICs'' improve computing power and efficiency
relative to older IC technology, enabling the compute miniaturization
necessary for the next generation of autonomous weapons systems, as
well as the compute scaling necessary for exascale supercomputing and
advanced AI capabilities, both of which can directly contribute to
development of WMD, advanced weapons systems, and high-tech
surveillance applications.
In particular, advancements in large-scale AI models have shown
striking performance improvements and can be utilized for advanced
military and intelligence applications. These large-scale AI models
have the ability to rapidly review large volumes of information and
synthesize it into digestible and actionable points, making them well-
suited for battlefield capabilities and thus having the potential to
alter the nature of warfare. They may also pose threats to national
security and foreign policy by diffusing dangerous capabilities by
lowering the barrier to develop cyberweapons or chemical, biological,
radiological, or nuclear weapons, developing tools with increasingly
autonomous capabilities relevant to national security applications, and
utilizing facial and voice recognition to surveil minorities and
political dissidents.
As discussed, BIS continues to advance U.S. national security and
foreign policy interests by imposing controls that reduce the risk U.S.
technology will contribute to the PRC's ability to carry out those
activities. Specifically, BIS has imposed controls on the SME and
related parts and components used to produce ``advanced-node ICs.'' BIS
has also added several FDP rules to Sec. 734.9 to extend the
jurisdiction of the EAR to additional foreign-made items, including
revisions to Sec. 734.9(e) to add a new product scope and end-user
scope for certain entities on the Entity List. This IFR also revises
the Sec. 734.9(e) (Entity List FDP rule) introductory text to
reference this new FN5 FDP and to also revise the paragraph heading, so
it references Entity List FDP rules to reflect that there is more than
one Entity List FDP rule described under paragraph (e).
Although those controls have been effective, BIS has found that PRC
entities of concern have continued purchasing SME items produced
outside the United States that include SME items produced with the use
of U.S. technology, software, or tools, as well as SME items using
components, such as ICs, necessary for the function of the SME items
and also produced with the use of U.S. technology, software, or tools.
U.S. technology, software, and tools therefore remain key to the
production or function of the SME items being purchased by PRC entities
of concern.
Based on these findings, this IFR implements the SME FDP and FN5
FDP, which will impose additional controls on certain SME items--which
are used for the production of ``advanced-node ICs''--as described
further in section 2 below. Both FDPs will regulate the products of
tools, ``technology,'' and ``software'' that are made or developed
using U.S.-origin ``technology'' or ``software,'' or which contain a
foreign product made from tools that are a product of U.S.-origin
``technology'' or ``software.'' As with the controls previously imposed
by the October 7 IFR and the SME IFR, the purpose of the SME FDP and
FN5 FDP rules is to reduce the risk that U.S. technology will
contribute to the PRC's efforts to produce ``advanced-node ICs'' that
threaten U.S. national security and foreign policy interests. As
detailed below, the SME FDP and FN5 FDP rules simply recognize that
certain SME items--which are already subject to comprehensive
restrictions when destined for advanced fabrication facilities in
Country Group D:5 or Macau when they originate from the United States--
should also be subject to controls when destined for such entities when
produced abroad, if they are directly produced with U.S. ``technology''
or otherwise contain a critical component that could not have been
produced without U.S. ``technology.''
2. Scope of FN5 FDP
Specifically, this interim final rule implements a new FDP rule for
entities on the Entity List designated with FN5 FDP. The entities added
to the Entity List with a Footnote 5 designation are being added
because of specific national security or foreign policy concerns
described in the Entity List rule, such as their involvement in
supporting the PRC's military modernization through
[[Page 96794]]
their potential to produce ``advanced-node ICs,'' including for
military end uses.
Because of the critical national security implications of these
technologies and the need to enhance the effectiveness of the Entity
List designations to address foreign availability concerns, this rule
implements the FN5 FDP to make certain foreign-produced items subject
to the EAR, and requires a license if the exporter, reexporter, or
transferor has ``knowledge'' (which includes reason to know) that (i)
such foreign-produced commodities will be incorporated in any ``part,''
``component,'' or ``equipment'' produced, purchased, or ordered by an
entity with a Footnote 5 designation; or (ii) any entity with a
Footnote 5 designation is a party to any transaction involving such
foreign-produced commodities.
The foreign-produced commodities subject to the FN5 FDP rule are
commodities most relevant to semiconductor production and related
activities and thus covers foreign-produced commodities meeting the
descriptions in 3B001 (except 3B001.a.4, c, d, f.1, f.5, g, h, k to n,
p.2, p.4, r), 3B002 (except 3B002.c), 3B903, 3B991 (except 3B991.b.2.a
through 3B991.b.2.b), 3B992, 3B993, or 3B994. The commodities covered
include certain ``equipment'' as well as certain ``specially designed''
``parts,'' ``components,'' and ``accessories,'' as described within the
scope of each ECCN. If a foreign-produced commodity does not meet any
of the descriptions in those Category 3 ECCNs, then the FN5 FDP does
not apply.
The foreign-produced commodities described in the Category 3 ECCNs
described above meet the product scope prong of the FN5 FDP rule if
they are: (i) a ``direct product'' of ``technology'' or ``software''
subject to the EAR and specified in ECCN 3D001 (for 3B commodities),
3D901, 3D991 (for 3B991 and 3B992), 3D993, 3D994, 3E001 (for 3B
commodities), 3E901 (for 3B903), 3E991 (for 3B991 and 3B992), 3E993, or
3E994 (see Sec. 734.9(e)(3)(i)(A)); (ii) produced by a complete plant
or `major component' of a plant (located outside the United States)
when the complete plant or `major component,' whether made in the
United States or a foreign country, is itself a ``direct product'' of
U.S.-origin ``technology'' or ``software'' specified in ECCN 3D001 (for
3B commodities), 3D901, 3D991 (for 3B991 and 3B992), 3D992, 3D993,
3D994, 3E001 (for 3B commodities), 3E901 (for 3B903), 3E991 (for 3B991
and 3B992), 3E992, 3E993, or 3E994 (see Sec. 734.9(e)(3)(i)(B)(1)); or
(iii) contain an commodity that is produced by a complete plant or
`major component' of a plant (located outside the United States) when
the complete plant or `major component,' whether made in the United
States or a foreign country, is itself a ``direct product'' of U.S.-
origin ``technology'' or ``software'' specified in ECCN 3D001 (for 3B
commodities), 3D901, 3D991 (for 3B991 and 3B992), 3D992, 3D993, 3D994,
3E001 (for 3B commodities), 3E901 (for 3B903), 3E991 (for 3B991 and
3B992)), 3E992, 3E993, or 3E994 (see Sec. 734.9(e)(3)(i)(B)(2)).
With respect to Sec. 734.9(e)(3)(i)(B)(2), this IFR adds Note 3 to
provide additional guidance on its product scope. Note 3 clarifies that
if a foreign-produced item contains an IC, and that IC was produced
with the use of a tool that itself was a ``direct product'' of U.S.-
origin technology or software specified in the ECCNs in Sec.
734.9(e)(3)(i)(B)(2), then the product scope would be met. In line with
BIS's application of its FDP rules concerning integrated circuits, the
note also specifies that the production of an integrated circuit
includes fabrication of the integrated circuit in a wafer, as well as
assembly, testing, and packaging of the integrated circuit.
In addition to the note, BIS is also adding a Red Flag to assist
parties in determining whether their products fall within Sec.
734.9(e)(3)(i)(B)(2). Specifically, based in part on its assessment of
supply chain data, BIS has found that there is a significant prevalence
of certain types of U.S.-origin tools (or foreign-produced tools that
are subject to the EAR) in fabrication facilities for the production of
integrated circuits. It can thus be presumed that any integrated
circuit has been produced using at least one U.S. tool qualifying as a
`major component' under Sec. 734.9(e)(3)(i)(B) of the FN5 FDP.
Therefore, as explained in greater detail below, this IFR adds Red Flag
26 to supplement no. 3 to part 732 stating that there is a Red Flag
that the product scope of the FN5 FDP is met if the foreign-produced
item contains at least one integrated circuit.
Importantly, as described above, the scope of the FN5 FDP is
calibrated in multiple places to ensure the rule captures those
transactions of national security and foreign policy concern. First,
the FN5 FDP captures only the products of the U.S. tools, technology,
and software that are relevant to the production of items (e.g.,
``advanced-node ICs'') of national security and foreign policy concern
by, for, or involving specific parties, who are identified on the
Entity List as involved in relevant activities of concern. The FN5 FDP
does not generally apply to the destinations identified in new
supplement no. 4 to part 742. U.S. national security and foreign policy
interests inform this approach. Governments in those destinations are
members of multilateral export control regimes (e.g., the Wassenaar
Arrangement on Export Controls for Conventional Arms and Dual-use Goods
and Technologies) and have the authority to control key SME items of
concern. Lastly, this IFR provides varying compliance dates to provide
parties time to comport with the new controls where possible consistent
with U.S. national security and foreign policy concerns. Parties need
not apply for a license, for example, until the compliance date or the
effective date, whichever is later. In so doing, this IFR calibrates
the pertinent restrictions to provide notice of this IFR's provisions
as well as time for parties to ensure they can properly classify their
items and otherwise comply with this IFR's new requirements.
3. Scope of SME FDP Rule
Under the SME FDP rule, specified foreign-produced commodities of
national security concern meet the destination scope of SME FDP if
there is ``knowledge'' that the foreign-produced commodity is destined
to Macau or a destination in Country Group D:5 of supplement no. 1 to
part 740 of the EAR.
The product scope of the SME FDP applies to: (i) a foreign-produced
commodity specified in 3B001.a.4, c, d, f.1, f.5, k to n, p.2, p.4, r,
or 3B002.c that is the ``direct product'' of ``technology'' or
``software'' subject to the EAR and specified in 3D992 or 3E992 of the
CCL; (ii) a foreign-produced commodity that is produced by any complete
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 ECCN 3D001 (for 3B commodities), 3D901, 3D991 (for 3B991
and 3B992), 3D992, 3D993, 3D994, 3E001 (for 3B commodities), 3E901 (for
3B903), 3E991 (for 3B991 or 3B992), 3E992, 3E993, or 3E994 of the CCL;
or (iii) contains a commodity produced by any complete plant or `major
component' of a plant that is located outside the United States, when
the complete plant or `major component' of a plant, whether made in the
U.S. or a foreign country, itself is a ``direct product'' of U.S.-
origin ``technology'' or ``software'' that is specified in ECCN
[[Page 96795]]
3D001 (for 3B commodities), 3D901, 3D991 (for 3B991 and 3B992), 3D992,
3D993, 3D994, 3E001 (for 3B commodities), 3E901 (for 3B903), 3E991 (for
3B991 or 3B992), 3E992, 3E993, or 3E994 of the CCL. For example, the
product scope of paragraph (k)(1) is met if a foreign-produced
commodity contains an integrated circuit that is produced by a complete
plant or `major component' of a plant that itself is a ``direct
product'' of U.S.-origin ``technology'' or ``software'' specified in
the ECCNs described in paragraph (k)(1)(ii)(B).
The license requirements and exclusions to the license requirements
associated with this SME FDP rule are found in Sec. Sec. 742.4(a)(4)
and 742.6(a)(6) of the EAR. See Sec. Sec. 742.4(b)(2) and 742.6(b)(10)
for license review policy applicable to foreign-produced items that are
subject to the EAR under this SME FDP rule. These license review
policies are each clarified by this IFR by adding ``however if Sec.
744.23 does not apply'' to make clear when the case-by-case license
review policy applies.
4. License Requirements and License Review Policy for Commodities
Subject to the EAR Pursuant to the FN5 FDP or SME FDP Rules (FDPR)
i. FN5 FDPR as Well as License Requirements in Sec. 744.11(a)(2)(v)
This IFR adds Sec. 744.11(a)(2)(v) to impose a license requirement
for entities listed on the Entity List (supplement no. 4 to part 744)
that are designated with new Footnote 5 (FN5 entities). This IFR adds
Sec. 744.11(a)(2)(v)(A) (License requirement) to specify that a
license is required for foreign-produced commodities to or within any
destination or to any end user or party, subject to the EAR pursuant to
Sec. Sec. 734.4(a)(9) or 734.9(e)(3), if any of the license
requirements under Sec. 744.11(a)(2)(v)(A)(1) through (A)(4) applies.
See Section B.1 regarding Sec. 734.4 provisions.
This IFR adds Sec. 744.11(a)(2)(v)(A)(1) for exports from abroad
or reexports from all countries. Specifically, a license is required
for commodities specified in ECCN 3B993 when exported from abroad or
reexported by an entity whose ultimate parent company is headquartered
in either Macau or a destination specified in Country Group D:5.
This IFR adds Sec. 744.11(a)(2)(v)(A)(2) for exports from abroad
or reexports from countries in Country Group A:5 that are not in
supplement no. 4 to part 742. Specifically, a license is required for
commodities specified in ECCN 3B993 if the commodity is not subject to
equivalent controls by the relevant country.
This IFR adds Sec. 744.11(a)(2)(v)(A)(3) for exports from abroad
or reexports from all countries not listed in Country Group A:5. These
license requirements apply under two scenarios. First, under Sec.
744.11(a)(2)(v)(A)(3)(i), a license is required for commodities
specified in ECCN 3B001 (except 3B001.a.4, c, d, f.1, f.5, k to n, p.2,
p.4, r), 3B002 (except 3B002.c), 3B611, 3B903, 3B991 (except
3B991.b.2.a through 3B991.b.2.b), 3B992, 3B993, or 3B994 to be exported
from abroad or reexported by an entity that is headquartered or whose
ultimate parent company is headquartered in a country not specified in
supplement no. 4 to part 742. Second, under Sec.
744.11(a)(2)(v)(A)(3)(ii), a license is required for commodities
specified in ECCN 3B993 to be exported from abroad or reexported by an
entity headquartered in or whose ultimate parent company is
headquartered in a country described in supplement no. 4 to part 742.
This IFR adds Sec. 744.11(a)(2)(v)(A)(4) for transfers (in-
country) within the country of the entity specified by Sec.
734.9(e)(3)(ii). These license requirements apply under two scenarios.
First, under Sec. 744.11(a)(2)(v)(A)(4)(i), a license is required for
transfers by an entity whose ultimate parent company is headquartered
in a country not described in supplement no. 4 to part 742 and the
entity is transferring a commodity specified in ECCN 3B001 (except
3B001.a.4, c, d, f.1, f.5, g, h, k to n, p.2, p.4, or r), 3B002 (except
3B002.c), 3B611, 3B903, 3B991 (except 3B991.b.2.a through 3B991.b.2.b),
3B992, 3B993, or 3B994. Second, under Sec. 744.11(a)(2)(v)(A)(4)(ii),
a license is required for transfers by an entity whose ultimate parent
company is headquartered in a country described in supplement no. 4 to
part 742 and the entity is transferring a commodity specified in ECCN
3B993. With respect to the scope of the license requirements under
Sec. 744.11(a)(2)(v)(A)(4), note that under the definition of transfer
(in-country) in Sec. 734.16, an in-country transfer is ``a change in
end use or end user of an item within the same foreign country.'' Thus,
if a tool has already been exported to a warehouse and will later be
moved to and installed in a production facility that was the intended
end user at the time of the export, the movement from the warehouse to
the production facility within the same country is not an in-country
transfer and would not be subject to the license requirements under
Sec. 744.11(a)(2)(v)(A)(4).
ii. New SME FDP as Well as Amendments to the National Security and
Regional Stability Controls
The license requirements for the new SME FDP in Sec. 734.9(k) are
in Sec. Sec. 742.4(a)(4) and 742.6(a)(6)(i) (national security (NS)
and regional stability (RS) controls, respectively), which correspond
to the reasons for control for the commodities that may be subject to
the EAR under the SME FDP. The license requirements are identical in
Sec. Sec. 742.4(a)(4) and 742.6(a)(6)(i). Changes to each of those
provisions is discussed below.
This rule updates the NS controls in Sec. 742.4(a)(4) to designate
the regulations at Sec. 742.4(a)(4)(i) as the scope of the license
requirement and Sec. 742.4(a)(4)(ii) for exclusions to the license
requirement. Under Sec. 742.4(a)(4)(i), the current license
requirement remains for exports, reexports, or transfers (in-country)
to or within either Macau or a destination specified in Country Group
D:5 of items specified in 3B001.a.4, c, d, f.1, f.5, k to n, p.2, p.4,
r, 3B002.c and related ``software'' and ``technology.''
Similarly, for RS controls, this rule also updates Sec.
742.6(a)(6)(i) to describe the scope of license requirements in Sec.
742.6(a)(6)(i)(A)(1) and exclusions from the license requirement in
Sec. 742.6(a)(6)(i)(A)(2). Under Sec. 742.6(a)(6)(i)(A)(1), the
current license requirement remains for exports, reexports, or
transfers (in-country) to or within Macau or a destination specified in
Country Group D:5.
The NS and RS sections also have identical exclusion paragraphs.
The existing exclusion from license requirements for deemed exports or
deemed reexports for both sets of controls is moved to new Sec. Sec.
742.4(a)(4)(ii) and 742.6(a)(6)(i)(A)(2), respectively. Under those
provisions, commodities subject to the EAR under Sec. Sec. 734.4(a)(8)
or the SME FDP do not require a license if the commodity is reexported
or exported from abroad by an entity located in a country specified in
supplement no. 4 to part 742, and the entity is not headquartered or
have an ultimate parent company headquartered in Macau or a destination
specified in Country Group D:5. Also, subject to the EAR under
Sec. Sec. 734.4(a)(8) or the SME FDP do not require a license if the
commodity is reexported or exported from abroad by an entity located in
a country that has implemented equivalent controls for items specified
in paragraph (a)(4)(i) of this section, and the entity is not
headquartered or have an ultimate parent company
[[Page 96796]]
headquartered in Macau or a destination specified in Country Group D:5.
For license requirements for in-country transfers, note that under
the definition of transfer (in-country) in Sec. 734.16, an in-country
transfer is ``a change in end use or end user of an item within the
same foreign country.'' Thus, if a tool has already been exported to a
warehouse and will later be moved to and installed in a production
facility that was the intended end user at the time of the export, the
movement from the warehouse to the production facility within the same
country is not an in-country transfer and would not be subject to the
license requirements in Sec. Sec. 742.4(a)(4)(i) and
742.6(a)(6)(i)(A)(1).
iii. License Review Policy
Lastly, this IFR adds Sec. 744.11(a)(2)(v)(B) (License review
policy) to specify the license review policy for each entity with a
Footnote 5 designation in the Entity List in supplement no. 4 to part
744. Unless specified otherwise in the license review policy column of
the applicable entity with a Footnote 5 designation, there is a case-
by-case license review policy for items subject to the license
requirements of this section where there is a foreign-made item that is
not subject to the license requirements of this section and performs
the same function as an item subject to the EAR license requirements of
this section.
B. Additional Revisions Related to the Production of Semiconductors and
Other Conforming Changes
1. Addition of New De Minimis Provisions Corresponding to the FN5 and
SME FDP Rules and a Conforming Change
To address the national security and foreign policy concerns
described above regarding the production of ``advanced-node ICs,'' this
interim final rule adds new de minimis provisions in Sec. Sec.
734.4(a)(8) and 734.4(a)(9) of the EAR. Section 734.4(a)(8) specifies
that there is no de minimis threshold level of U.S. controlled content
for commodities specified in ECCNs 3B001.a.4, c, d, f.1, f.5, k to n,
p.2, p.4, r, or 3B002.c when the commodity is incorporated in a U.S.-
origin IC or contains a U.S.-origin IC specified under Category 3, 4,
or 5 of the CCL, and the commodity is destined for Macau or a
destination specified in Country Group D:5, unless excluded from the
national security license requirement in Sec. 742.4(a)(4) or the
regional stability license requirement in Sec. 742.6(a)(6) of the EAR.
Section 734.4(a)(9) specifies that there is no de minimis level for
an item meeting the parameters in ECCNs specified in Category 3B
(except 3B001.a.4, c, d, f.1, f.5, k to n, p.2, p.4, r, or 3B002.c) of
the CCL in supplement no. 1 to part 774 of the EAR, when the commodity
is incorporated in a U.S.-origin integrated circuit or contains a U.S.-
origin integrated circuit specified under Category 3, 4, or 5 of the
CCL, and the commodity is destined for an entity with a Footnote 5
designation in the license requirement column of the Entity List in
supplement no. 4 to part 744 of the EAR.
These new provisions ensure that foreign-produced SME containing
U.S.-origin ICs (or other components) are controlled to the same extent
as foreign-produced SME containing items controlled by the SME FDP rule
and the FN5 FDP rule.
This IFR makes a conforming change to Sec. 734.4(a)(3) by
replacing ECCN 3B001.f.1.b.2.b with 3B993.f.1 because this is the new
location of the control.
2. Addition of New License Exception Restricted Fabrication Facility
(RFF)
The new License Exception RFF will allow certain items, including
specified SME, to be exported, reexported, exported from abroad, or
transferred (in-country) to certain fabrication facilities that are
subject to end user-based license requirements but that are not
currently producing ``advanced node ICs.'' This license exception is
available for these fabrication facilities to obtain legacy equipment
and related items to produce non-``advanced node ICs'' through a
framework that establishes guardrails and monitoring to address U.S.
national security concerns. This includes terms and conditions on the
use of License Exception RFF, such as excluding from eligibility items
essential for producing ``advanced-node ICs,'' as well as requiring
pre-shipment notifications, end-use monitoring, and annual reporting.
The license exception also has restrictions related to the operation,
installation, maintenance, repair, overhaul, or refurbishing of items
ineligible under RFF that may already be part of the entity's installed
base. BIS believes that these restrictions, along with existing
countrywide license requirements for SME and related items that cannot
be overcome by RFF, will further U.S. national security and foreign
policy objectives. Under the concurrently published EL rule, one entity
is eligible for this license exception.
License Exception RFF, found in new Sec. 740.26, only overcomes
license requirements in the license requirements column of a specific
entity when Sec. 740.26 is referenced in that Entity List entry. This
license exception does not overcome destination-based license
requirements, end-use based license requirements in other sections of
part 744, or license requirements that apply to other entities on the
Entity List if other listed entities are a party to the transaction.
License Exception RFF authorizes the export, reexport, export from
abroad, and transfer (in-country) of items not specified in ECCN 3B001,
3B002, 3B993, 3B994, 3D992, 3D993, 3D994, 3E992, 3E993, or 3E994. For
commodities exported, reexported, or transferred prior to December 5,
2024. License Exception RFF may not be used for the operation,
installation, maintenance, repair, overhaul, or refurbishing of
commodities specified in ECCN 3B001.a.4, c, d, f.1, f.5, k to n, p.2,
p.4, r, or 3B002.c, or 3B993, or 3B994. Also, any item exported,
exported from abroad, reexported, or transferred under License
Exception RFF may not be used to produce ``advanced-node ICs.'' There
is also a notification that must be sent to BIS 45 days prior to
exporting, reexporting, exporting from abroad, or transferring (in-
country) that includes the end-user's name and address, description of
item(s), purchase price, and anticipated shipping date of export,
reexport, or transfer (in-country). These changes are expected to
result in an increase of 306 prior notifications under Sec.
740.26(d)(1) to BIS under License Exception RFF.
In addition, a notification must be sent to BIS within one business
day of gaining ``knowledge'' that the end use has changed to ``advance-
node IC'' ``production.'' These changes are expected to not result in
an annual increase of ``one-business day'' notifications under Sec.
740.26(d)(2) to BIS under License Exception RFF or a minimal number of
one business day notifications, provided the other terms and conditions
of License Exception RFF are being followed.
There is also a reporting requirement for installation of SME that
must be sent to BIS within 30 days of installation. These changes are
expected to result in an annual increase of 306 installation reports
under Sec. 740.26(e)(1) to BIS under License Exception RFF.
In addition, there is an annual end-use confirmation report that
must be sent to BIS by the exporter, reexporter, or transferor that
confirms that the installed equipment is not being used in the
productions of ``advanced-node ICs.'' These changes are expected to
result in an annual increase of 102 installation reports under Sec.
740.26(e)(2) to BIS under License Exception RFF.
[[Page 96797]]
As a conforming change for the addition of License Exception RFF,
in Sec. 762.2 (Records to be retained) this IFR revises paragraph (b)
(Records retention references) to add a new paragraph (b)(57) to
reference Sec. 740.26, License Exception RFF as a new records
retention reference. This change is a conforming change with the
addition of License Exception RFF and the new notification and
reporting requirements under Sec. 740.26(d) and (e), respectively,
which are considered ``export control records'' for purposes of the EAR
and must be kept in accordance with the requirements of part 762 of the
EAR.
3. Addition of Eight New Red Flags To Assist With Compliance
In supplement no. 3 to part 732 (BIS's ``Know Your Customer''
Guidance and Red Flags), this IFR adds eight new Red Flags under
paragraphs (b)(20) through (27) that are intended to provide additional
compliance guidance to assist exporters, reexporters, and transferors
as part of their compliance programs. These eight new Red Flags are in
addition to the five Red Flags that were added by the AC/S IFR. As
specified in the ``Know Your Customer'' Guidance and Red Flags, various
requirements of the EAR are dependent upon a person's knowledge of the
end use, end user, ultimate destination, or other facts relating to a
transaction or activity. BIS provides the ``Know Your Customer''
Guidance and Red Flags to advise how individuals and firms should act
under this knowledge standard.
New Red Flag 20 identifies a scenario where a non-advanced
fabrication facility orders equipment designed for ``advanced-node IC''
production (e.g., Sec. 742.4(a)(4) ECCNs). This scenario raises a Red
Flag because this technology mismatch indicates the fabrication
facility produces or intends to produce ``advanced-node ICs.'' The
exporter, reexporter, or transferor must resolve this Red Flag before
proceeding with the transaction.
New Red Flag 21 identifies a scenario where an exporter,
reexporter, or transferor receives an order for which the ultimate
owner or user of the items is uncertain, such as a request to ship
equipment for the ``development'' or ``production'' of ICs to a
distributor without a manufacturing operation, when the item is
ordinarily customized for the end user or installed by the supplier.
Under this scenario the distributor would never be the end user of such
equipment, which means that the ultimate owner or beneficiary is
unknown to the exporter, reexporter, or transferor. This uncertainty
raises a Red Flag that needs to be resolved before the exporter,
reexporter, or transferor proceeds with the transaction. New Red Flag
21 specifies this uncertainty requires the need for due diligence
particularly for items where such information would typically be known
to an exporter, reexporter, or transferor, such as for advanced
computing items, supercomputers, or SME.
New Red Flag 22 identifies a scenario where an order or request
related to an item that would require an export, reexport, or in-
country transfer license from BIS or another jurisdiction (i.e., from
another foreign government) that maintains controls on the item and the
exporter, reexporter, or transferor has uncertainty about the license
history for the item--meaning the exporter, reexporter, or transferor
is not sure whether the export, reexport, or transfer (in-country) was
properly authorized in accordance with the EAR and/or by the respective
foreign government. New Red Flag 22 provides an example where there is
information known to the exporter, reexporter, or transferor indicating
that a license was not, or was not likely to have been, obtained by the
end user, such as where the end user or end use, or the ECCN and end-
user destination triggers a license review policy of a presumption of
denial. New Red Flag 22 specifies that these uncertainties raise a Red
Flag that needs to be resolved before the exporter, reexporter, or
transferor proceeds with further transactions related to the item to
avoid the risk of violating Sec. 764.2(e), which includes acting on
requests to service, install, upgrade, or otherwise support the item of
concern.
New Red Flag 23 identifies a scenario where an exporter,
reexporter, or transferor receives a request to service, install,
upgrade, or otherwise maintain an item that was altered after export by
a third-party for a more advanced end use that would normally require a
license for the destination. New Red Flag 23 specifies that this
scenario would raise a Red Flag that the item is employed in a
prohibited end use that would need to be resolved before proceeding
further with the transaction.
New Red Flag 24 identifies another scenario related to a request
for an item or service from a new customer whose senior management or
technical leadership (e.g., process engineers that are team leaders or
otherwise leading development or production activities) overlaps with
an entity on the Entity List, particularly if the supplier previously
provided the same or substantially similar item or service to the
Entity List entity, most likely prior to the listed entity being added
to the Entity List. New Red Flag 24 specifies that this scenario would
raise a Red Flag that the entity requesting the item or service is
engaged in or supporting the same prohibited end use as the Entity List
entity. The exporter, reexporter, or transferor would need to conduct
additional due diligence before proceeding with the transaction with
the new customer.
New Red Flag 25 identifies another scenario related to servicing a
request from a new customer for an item or service that was designed or
modified for an existing or former customer that is now designated on
the Entity List. New Red Flag 25 specifies that this scenario would
raise a Red Flag that the new customer has assumed the operations for
which the item or service is still needed to engage in or support the
same prohibited end use for which the Entity List entity was listed.
This Red Flag would need to be resolved by the exporter, reexporter, or
transferor before proceeding.
New Red Flag 26 provides additional guidance that will assist
exporters, reexporters, and transferors in complying with the two new
FDP rules added to the EAR in this IFR. See section III.A of this
preamble for a description of the two new FDP rules related to the
production of ``advanced-node ICs'' implemented by this IFR. Red flag
26 specifies that when analyzing the scope of the Entity List FDP rules
for Footnote 5 entities, if a foreign-produced item is described in the
relevant Category 3B ECCN in Sec. Sec. 734.9(e)(3)(i) or 734.9(k)(1)
and contains at least one IC, then there is a Red Flag that the
foreign-produced item meets the product scope of the applicable FDP
rule and the exporter, reexporter, or transferor must resolve the Red
Flag before proceeding. Key components, including ICs, are key to the
functioning of SME, and such components are dependent on U.S.
technology and software as well as on tools derived from U.S.
technology and software. BIS has concluded, based on assessments of
supply chain data, that there is a significant prevalence of certain
types of U.S.-origin tools (or foreign-produced tools that are the
direct product of U.S.-origin technology or software) in fabrication
facilities for the production of ICs. As with all Red Flags, exporters,
reexporters, and in-country transferors will need to conduct due
diligence before continuing with the transaction. Such additional
diligence is necessary in order to ensure that items produced with the
use of U.S. technology, software, or tools, including ICs that are
contained in the specified foreign-produced commodities being
[[Page 96798]]
controlled, are not sent to end users contrary to U.S. national
security and foreign policy interests.
New Red Flag 27 identifies a scenario where the end user is a
``facility'' that is physically connected to a ``facility'' where
``production'' of ``advanced-node ICs'' occurs. Each building is
considered a separate ``facility,'' but if multiple buildings are
connected in such a way that allows for the ``production'' of the
integrated circuits across the physically connected buildings, this
raises a Red Flag that ``production'' of ``advanced-node ICs'' occurs
in each one of the connected facilities. The Note to Number 27 states
that, for example, if an exporter, reexporter, or transferor receives
an equipment order from a company that is engaged in ``production'' of
non-``advanced-node ICs'' in one building, and this building is
physically connected to another building where the ``production'' of
``advanced-node ICs'' occurs, then both buildings would be subject to
the controls under Sec. 744.23 of the EAR, unless the exporter can
demonstrate that the destination facility is not engaged in the
``production'' of ``advanced-node ICs.'' The Note to Number 27 provides
that to resolve the red flag, the exporter should submit an advisory
opinion to BIS. Otherwise, the two buildings are treated as a single
``facility'' for purposes of license requirements under Sec. 744.23 of
the EAR.
4. Revisions to the Definition of ``Advanced-Node Integrated Circuit''
Related to DRAM
In Sec. 772.1 (Definitions of terms as used in the Export
Administration Regulations (EAR)), this IFR revises the definition of
``Advanced-Node Integrated Circuits (Advanced-Node IC)'' by revising
the criteria for how DRAM ICs is defined. In paragraph 3 of the
definition, this IFR removes the criterion using a ``production''
`technology node' of `18 nanometer half pitch or less' and adds in its
place two different criteria. When either of these two criteria are
met, the commodity would be considered a DRAM integrated circuit for
purposes of this definition. Specifically, this IFR specifies that DRAM
integrated circuits meet the definition of ``Advanced-Node Integrated
Circuits (Advanced-Node IC)'' when the integrated circuit either has a
memory cell area of less than 0.0019 square micrometers ([mu]m\2\); or
a memory density greater than 0.288 gigabits per square mm.
For additional context on the reason for this change, in parts 734
and 744 of the EAR, ``advanced-node ICs'' include logic, DRAM, and NAND
ICs that meet certain technical parameters. This IFR updates the
technical parameters defining advanced-node DRAM ICs. The previous
definition used half-pitch to characterize advanced-node DRAM ICs.
However, that definition allowed fabrication facilities to make
substantial improvements in memory density by using more compact memory
cell architectures, as well as by stacking DRAM in three dimensions,
without meeting the definition, thereby avoiding controls. Furthermore,
the previous definition did not capture HBM, which is crucial to
frontier AI training and inference and is typically co-packaged with
advanced logic chips for datacenter AI and supercomputing.
The definition in this IFR uses a memory density and memory cell
area standard that captures both advances in memory cell
miniaturization as well as HBM and other memory devices that stack
layers of DRAM vertically to achieve greater densities without reducing
half-pitch. A technical note also defines the cell area. The intent of
this change in the definition of advanced-node DRAM ICs is not to
change the current impact of the end-user controls, but to prevent
possible future workarounds, especially the production of high
bandwidth memory for advanced computing ICs. As a conforming change,
the reference to paragraph three is removed from Note 1 to the
definition.
This IFR also removes the Technical Note to the definition, as it
is no longer needed because of the other clarifying changes made to
this definition, in particular the addition of new Note 2 to the
definition of ``Advanced-Node Integrated Circuits.'' This IFR adds a
new Note 2 to the definition of ``Advanced-Node Integrated Circuits
(Advanced-Node IC)'' to specify that memory density is measured in
gigabytes (GB) of memory capacity of the package or stack, divided by
the footprint of the package or stack measured in square millimeters.
Note 2 also clarifies that in the case where a stack is contained in a
package, the area of the package should be used in the classification.
Finally, Note 2 specifies that cell area is defined as Wordline*Bitline
(which takes into consideration both transistor and capacitor
dimensions).
5. Clarifications to Section 744.23
(i) Revisions To Address Support for ``Development'' and ``Production''
of Advanced-Node ICs
This IFR adds new paragraph (a)(2)(iii) in Sec. 744.23 to clarify
that Sec. 744.23(a)(2) restricts the provision of Electronic Computer
Aided Design (ECAD) and Technology Computer Aided Design (TCAD)
``software'' and ``technology'' subject to the EAR when you ``know'' it
will be used in the design of ``advanced-node IC'' whose subsequent
``production'' will be in Macau or a destination in Country Group D:5.
This IFR also adds new paragraph (a)(2)(iv) in Sec. 744.23 to add
an ``advanced node IC'' exclusion to specify the license requirements
for items specified in paragraphs (a)(2)(i) and (ii) destined to
entities designated with a Footnote 5 are not subject to the license
requirements in this section. This IFR adds this exclusion because the
Entity List license requirements for these Footnote 5 entities will
already impose a license requirement for these items, so the additional
license requirement under Sec. 744.23(a)(2)(i) and (ii) is not needed
to protect U.S. national security and foreign policy interests for
these entities.
(ii) Revisions To Address Support for Indigenization of Semiconductor
Manufacturing Supply Chains
BIS continues to evaluate public comments received on the AC/S IFR,
the SME IFR, and the April 4 IFR. BIS intends to address those comments
in a future rulemaking. In the meantime, in this IFR, BIS is revising
Sec. 744.23(a)(4) to address several specific questions and concerns
about the application of Sec. 744.23(a)(4)(ii)(B), added in the April
4 IFR, to both the initial and intermediate ``development'' or
``production'' of Category 3B SME specified in Sec. 744.23(a)(4).
Specifically, BIS is revising Sec. 744.23(a)(4)(ii) to make clear that
the end-use control may apply to any item subject to the EAR and
specified on the CCL when: (1) the item (either in its original form or
as subsequently incorporated into a foreign-made item) is for the
``development'' or ``production'' of any foreign-made item specified in
the end-use control; and (2) the ``development'' or ``production'' is
by an entity headquartered in or whose ultimate parent is headquartered
in Macau or a destination specified in Country Group D:5. Because of
this clarification to paragraph (a)(4)(ii), paragraph (B) is no longer
needed, so this IFR removes paragraph (a)(4)(ii)(B) and redesignates
paragraph (a)(4)(ii)(C) as paragraph (B).
BIS is also adding the parenthetical phrase ``(and not excepted by
that paragraph)'' to paragraph (A) of Sec. 744.23(a)(4)(ii)(A) to
clarify that the exclusions (e.g., for masks) to the ECCNs listed in
Sec. 744.23(a)(4)(i) also apply in the controls under Sec.
744.23(a)(4)(ii).
[[Page 96799]]
Further, BIS is eliminating the qualification for `front-end
integrated circuit ``production'' equipment' in current Note 1 to Sec.
744.23(a)(4). BIS believes this approach will simplify compliance with
the end-use control by eliminating questions about whether an end-use
involves ``development'' or ``production'' of a `front-end' versus
`back-end' item, and it will reduce the risk that items subject to the
EAR are diverted from purported ``development'' or ``production'' of
back-end items to front-end items specified in the same ECCNs. As noted
in the SME IFR, BIS continues to welcome feedback from industry on
specific ECCNs that are not used in front-end production of ICs and
could be excluded from the ECCN scope of Sec. 744.23(a)(4).
BIS is also adding ECCN 3B903 to the list of qualifying ECCNs to
reflect updates to Category 3B under the IFR, ``Commerce Control List
Additions and Revisions; Implementation of Controls on Advanced
Technologies Consistent with Controls Implemented by International
Partners'' (89 FR 72926, September 6, 2024).
SME specified in ECCNs 3B903, 3B992, 3B993, and 3B994 are added to
the end-use license requirement in Sec. 744.23(a)(4)(i). Accordingly,
a license is now required to export, reexport, transfer (in-country)
any item subject to the EAR and specified on the CCL when destined to
or within either Macau or a destination specified in Country Group D:5
for the ``development'' or ``production'' of ``equipment,''
``components,'' ``assemblies,'' or ``accessories'' specified in ECCNs
3B903, 3B992, 3B993, and 3B994.
Additional changes to Sec. 744.23 are discussed in section III.C.2
of the preamble.
6. Conforming and Clarifying Revisions to General Prohibition Three
In Sec. 736.2 (General prohibitions and determination of
applicability), this IFR revises paragraph (b)(3)(i) (General
Prohibition Three--Foreign-direct product (FDP) rules), to clarify that
the prohibition extends to any foreign-produced items that are subject
to the EAR pursuant to Sec. 734.9 if such items are subject to a
license requirement in part 736, 742, 744, 746, or 764 of the EAR. The
existing Entity List FDP rules under Sec. 734.9(e)(1) and (2) already
extend to foreign-``direct products'' and certain other foreign-
produced items, and the new FN5 FDP will do the same. This revision to
Sec. 736.2(b)(3)(i) is a conforming and clarifying change.
7. Revision to General Order No. 4 Temporary General License
The Temporary General License (TGL) in supplement no. 1 to part
736, General Order no. 4, is amended by adding newly added SME ECCNs
(i.e., 3B001.c.4, 3B993.b.1, c.2, c.3, d.4, f.2, f.3, o.2, q.1, q.2,
3B994, 3D993.a (for commodities specified in paragraph (d)(1)(i)(B)),
3D993.b through .d, 3D994, 3E993.a (for commodities specified in
paragraph (d)(1)(i)(B)), 3E993.b, and 3E994) to this authorization in
paragraph (d)(1)(i). Paragraph (d)(2)(ii) is revised by adding 3A090.c
when destined to or within Macau or a destination in Country Group D:5
and cascading the paragraph into three separate paragraphs
(d)(2)(ii)(A)(1) through (3). See Section C.2 for more details
regarding the addition of 3A090.c (high bandwidth memory). In addition,
a new paragraph (d)(2)(ii)(B) is added to add an additional ultimate
end use for 3A090.c. This IFR also revises the paragraph (d)(3)
validity date to extend it as follows: (1) for SME items controlled
only for AT reasons, until December 31, 2026; (2) for SME items added
to the CCL in this rule (i.e., excluding items that were moved from
3B001 to 3B993, but not previously eligible for paragraph (d)(1)) until
December 31, 2026; (3) for items specified in paragraph (d)(2)(i)(A),
until December 2025; and (4) for HBM items specified in paragraph
(d)(2)(i)(B), until December 2026. In order to not disrupt IC supply
chains and from discussions with industry, BIS is extending the
validity period for AT only items for one additional year (December 31,
2026). BIS is setting the validity period for SME items added to the
CCL to one year (December 31, 2026). BIS is not extending the validity
deadline for advanced compute items because it is no longer needed
because of new licenses and new additions to the VEU for these
companies. The validity for the new HBM items is set at one year
(December 31, 2026) to allow for adjustment to the new controls.
8. Revisions to ``U.S. Persons'' Restrictions in Sec. 744.6
This IFR revises paragraph (c)(2)(iii) of Sec. 744.6 to
synchronize the product scope with the license requirement product
scope in Sec. Sec. 742.4(a)(4) and 742.6(a)(6) of the EAR.
9. Revisions to Sec. 770.2
This IFR revises Sec. 770.2 to make conforming changes to
paragraph (o)(2)(i) by adding ECCNs 3D992, 3D993, 3E992, and 3E993.
10. Conforming Changes to Foreign Direct Product Rules
This IFR adds ECCNs 3D901, 3D992, 3D993, 3D994, 3E901, 3E992,
3E993, and 3E994 to the following foreign direct product rules in Sec.
734.9: Entity List FDP: Footnote 1 (Sec. 734.9(e)(1)(i)(A) and (B)),
Entity List FDP: Footnote 4 (Sec. 734.9(e)(2)(i)(A) and (B)), Advanced
Computing FDP rule (Sec. 734.9(h)(1)(i)(A) introductory text,
(h)(1)(ii)(A)), Supercomputer FDP rule Sec. 734.9(i)(1)(i) and (ii)).
11. Conforming Changes to Section 742.4
This IFR corrects a paragraph designation in Sec. 742.4 under
paragraph (a)(5) to redesignate the second reference to paragraph
(a)(5)(ii)(B)(i) and (ii) as paragraphs (a)(5)(ii)(B)(1) and (2) as
intended. This IFR does not change the first reference to paragraph
(a)(5)(ii) in Sec. 742.4, which is correct.
C. Addition of High Bandwidth Memory (HBM) Controls
1. Addition of New 3A090.c
Control of advanced memory chips is key to national security
because of their military, intelligence, and surveillance applications.
In particular, advanced AI models rely on a type of advanced memory
called HBM, which is found in almost all advanced computing ICs
destined for advanced AI data centers. As the speed of advanced logic
increases, a similar increase in memory capacity and bandwidth is
required; otherwise, the full capabilities of the processor cannot be
realized. In advanced AI and supercomputing, advanced logic chips must
be paired with advanced memory to avoid this memory bottleneck. As
such, HBM is critical to both AI training and inference at scale and a
key component of advanced computing ICs.
Based on the importance of HBM described above, BIS is adding a new
ECCN control on HBM stacks with a specific memory bandwidth density to
ECCN 3A090.c. HBM units are optimized for very high memory bandwidth,
unlike general consumer-grade dynamic random access memory (DRAM)
chips, so this threshold will narrowly target controls at HBM. BIS uses
the bandwidth density--rather than just the bandwidth--to ensure
controls will still apply if an IC uses a larger quantity of smaller
HBM chips at little additional cost. As indigenous PRC advanced
computing ICs rely upon imported HBM, new ECCN 3A090.c implements
restrictions to slow PRC attempts to indigenize advanced AI chip
production, which, as explained above,
[[Page 96800]]
raises national security and foreign policy concerns.
Under ECCN 3A090, this IFR adds a new items paragraph .c to impose
a new CCL-based control for certain HBM commodities. Also, under the
advanced computing FDP rule in Sec. 734.9(h), foreign-produced 3A090.c
items will be subject to the EAR if they meet the scope of that FDP
rule. Under new 3A090.c, this IFR will control HBM having a `memory
bandwidth density' greater than 2 GB per second per square millimeter
(mm). All HBM stacks currently in production exceed this threshold.
This IFR also adds a technical note to 3A090.c to define for
purposes of this ECCN that `memory bandwidth density' is the memory
bandwidth of the package or stack measured in GB per second divided by
the area of the package or stack measured in square mm. The new
technical note to 3A090.c includes a sentence to clarify that where a
stack is contained in a package, the item should be classified using
the memory bandwidth of the packaged device and the area of the
package. The new technical note to 3A090.c also includes a sentence
highlighting that high bandwidth memory includes dynamic random access
memory integrated circuits, regardless of whether they conform to the
JEDEC standards for high bandwidth memory, provided they have a `memory
bandwidth density' greater than 2 GB per second per square mm. Lastly,
technical note to 3A090.c specifies that certain co-packaged integrated
circuits are excluded from the scope of 3A090.c, as this control does
not cover co-packaged integrated circuits with both HBM and logic,
where the dominant function of the co-packaged integrated circuit is
processing. The technical note further clarifies that this control does
include HBM permanently affixed to a logic integrated circuit designed
as a control interface and incorporating a physical layer (PHY)
function. Advanced computing ICs containing co-packaged logic and HBM
are not controlled by 3A090.c, though they may be controlled by other
ECCNs such as 3A090.a or 3A090.b depending on their Total Processing
Performance (TPP) and performance density.
This IFR imposes these new controls on HBM stacks under ECCN
3A090.c because these commodities are an important part of the
``production'' process for making advanced computing ICs, which prior
to this IFR were not being controlled under ECCN 3A090. In order to
more effectively address the national security and foreign policy
concerns which are being addressed under ECCN 3A090, BIS added a
control on HBM to prevent the PRC, as well as other destinations of
concern, from producing advanced computing ICs incorporating HBM.
If these HBM stacks are incorporated into an IC or a higher-level
commodity, such as a computer or electronic assembly, then ECCN
3A090.a, .b, 4A090.a or .b, or the respective .z controls may impose
controls on the commodities containing HBM. The national security and
foreign policy concerns are focused on HBM, as covered under 3A090.c,
that is exported as a stand-alone commodity (i.e., when not
incorporated into a higher-level commodity). When a 3A090.c commodity
is incorporated into another commodity, such as a 3A090.a, .b, or
another commodity, the EAR controls applicable to those other
commodities are sufficient to address the export control concerns with
these 3A090.c commodities.
This IFR also redesignates and revises Note 2 to 3A090 as new Note
1 to 3A090.a and 3A090.b, including adding references to 3A090.a and
3A090.b in the note and repositioning the note, so it appears
immediately after 3A090.a and .b. This IFR also redesignates Note 1 to
3A090 as Note 2 to 3A090 to reflect the reordering of the notes in ECCN
3A090.
2. Conforming Changes for Addition of 3A090.c
This IFR also makes the following eight conforming changes to other
parts of the EAR to address the addition of 3A090.c:
In supplement no. 1 to part 736--General Orders, this IFR revises
General Order No. 4 under paragraph (d)(2) (TGL--Advanced computing
items) to redesignate the introductory text of (d)(2)(ii) (End-use
scope), except for the heading that is added by this rule, as new
paragraph (d)(2)(ii)(A) (For all items under paragraph (d)(2)(i)). This
IFR also adds a new paragraph (d)(2)(ii)(B) (Additional permitted
ultimate end use for 3A090.c.) to clarify the application of the
ultimate end use requirement for 3A090.c commodities that are
authorized under the TGL. As described in new paragraph (d)(2)(ii)(A),
for other items, the TGL requires the ultimate end use of these other
items to be outside of destinations specified in Country Groups D:1,
D:4, or D:5 (and not specified in Country Groups A:5 or A:6) by
entities not headquartered in or whose ultimate parent company is not
headquartered in Macau or a destination specified in Country Group D:5
in all cases. The first sentence under new paragraph (d)(2)(ii)(B)
specifies that the ultimate end use of 3A090.c commodities allows for
use in any destination once the 3A090.c commodity is incorporated into
another commodity, provided that higher-level commodity is not a
commodity that is identified under paragraph (d)(2)(i) of this General
Order No. 4. This sentence is needed because 3A090.c in certain cases
may be incorporated into consumer electronics that would not otherwise
be of concern for advanced AI, so therefore the ultimate end-use
restriction is qualified with the addition of this sentence. The second
sentence under new paragraph (d)(2)(ii)(B) specifies that if the higher
level commodity is identified under paragraph (d)(2)(i), of this
General Order No. 4, then the ultimate end use of these items is
authorized under paragraph (d)(2)(ii) for destinations other than those
specified in Country Groups D:1, D:4, or D:5 (and not specified in
Country Groups A:5 or A:6) by entities not headquartered in or whose
ultimate parent company is not headquartered in Macau or a destination
specified in Country Group D:5. Lastly, the third sentence under new
paragraph (d)(2)(ii)(B) clarifies that any subsequent export, reexport,
or transfer (in-country) of a 3A090.c commodity (regardless of whether
it was incorporated into a higher-level commodity) would also need to
comply with any other applicable EAR license requirements that may be
applicable, such as those based on the classification (including, if
relevant, of the higher-level commodity) and the end use and parties to
the transaction.
This IFR revises the introductory text in Sec. 740.8 (Notified
Advanced Computing (NAC) and Advanced Computing Authorized (ACA)),
paragraph (a) (Eligibility requirements) to specify that ECCN 3A090.c
is not eligible for License Exception NAC or ACA. This exclusion is
made because of concerns that HBM classified under 3A090.c could be
diverted for incorporation into other items that would be of national
security and foreign policy concern for advanced AI model training
applications. However, if the HBM is incorporated into another
commodity, those concerns are sufficiently addressed through the export
controls imposed under the EAR for the higher-level commodity. Based on
the same rationale, this IFR does not extend the .z controls to items
that meet or exceed the controls parameters under 3A090.c, because if a
3A090.c item is incorporated into a higher-level commodity, the
classification and controls for the higher-level commodity
[[Page 96801]]
applies. Lastly, if a 3A090.c commodity were incorporated into a
commodity that is eligible for License Exception NAC or ACA, that
higher-level commodity (e.g., a 3A090.b commodity) would not be
precluded from being authorized under License Exception NAC or ACA. See
Sec. 770.2 (Item interpretations) under paragraph (b) (Interpretation
2: Classification of ``parts'' of machinery, equipment, or other
items). As an additional conforming change for this exclusion of
3A090.c from NAC and ACA, this IFR also revises the NAC/ACA paragraph
in the License Exceptions section of ECCN 3A090 to specify that NAC/ACA
is N/A for 3A090.c.
This IFR makes a third conforming change in Sec. 742.6 (Regional
stability). Paragraph (a)(6)(i) (Exports, reexports, transfers (in-
country) to or within Macau or Country Group D:5) is revised to
designate the text in paragraph (a)(6)(i) as paragraph (a)(6)(i)(A) and
add a new paragraph (a)(6)(i)(B) to set forth license requirements for
high bandwidth memory (HBM) items specified in ECCNs 3A090.c, 3D001
(for 3A090.c), and 3E001 (for 3A090.c) when exported, reexported, or
transferred (in-country) to or within Macau or a destination specified
in Country Group D:5 in supplement no. 1 to part 740 of the EAR.
This IFR also revises, as a conforming change, paragraph
(a)(6)(iii) (Exports, reexports, transfers (in-country) to or within
destinations specified in Country Groups D:1, D:4, and D:5, excluding
destinations also specified in Country Groups A:5 or A:6) to specify
that 3A090.c, 3D001 (for 3A090.c), and 3E001 (for 3A090.c) are excluded
from the license requirements in this paragraph. These conforming
changes are needed because the license requirements described in
paragraph (a)(6)(iii) that apply for 3A090 and for the related software
and technology controls for 3A090 will not apply for 3A090.c, which
will have narrower RS license requirements than the rest of 3A090, as
this IFR specifies in paragraph (a)(6)(i).
This IFR also revises paragraph (b)(10)(i) to update the reference
to newly designated paragraph (a)(6)(i)(A), in alignment with the
change made to that paragraph. This IFR redesignates paragraph
(b)(10)(ii) as paragraph (b)(10)(iii), and new paragraph (b)(10)(ii)
now sets forth the license review policy for new paragraph (a)(6)(i)(B)
(for HBM). There is a presumption of approval review policy for license
applications for items specified in paragraph (a)(6)(i)(B) to or within
Macau or a destination specified in Country Group D:5 in supplement no.
1 to part 740 of the EAR for entities neither headquartered in, nor
whose ultimate parent company is headquartered in, either Macau or a
destination specified in Country Group D:5. There is a presumption of
denial policy for all other license applications.
This IFR also revises former paragraph (b)(10)(ii) (License review
policy for paragraph (a)(6)(iii)) to cascade it into two new paragraphs
(b)(10)(iii)(A) for presumption of approval policy and paragraph
(b)(10)(iii)(B) for presumption of denial and case-by-case policy. The
presumption of approval policy in paragraph (b)(10)(iii)(A) and the
presumption of denial policy in paragraph (b)(10)(iii)(B) is unchanged
by this IFR. BIS has added a case-by-case license review policy for
paragraphs (b)(10)(iii)(B)(i) and (ii), which are those that would
qualify for License Exception NAC in Sec. 740.8 of the EAR.
This IFR makes a fourth and fifth conforming change in Sec. 744.23
(``Supercomputer,'' ``advanced-node ICs,'' and SME end use controls).
This IFR makes a conforming change to paragraph (a)(3)(i) to account
for the RS license requirement for 3A090.c items destined to Macau or
destinations specified in Country Group D:5, requiring a different
destination scope for the end-use control under Sec. 744.23(a)(3)(i)
compared to the other items referenced in this paragraph. This IFR
addresses this needed end-use control conforming change by making the
following changes. In Sec. 744.23(a)(3)(i), this IFR adds a heading to
paragraph (i) (ECCNs 3A090, 4A090, and .z items destined to entities
headquartered in, or whose ultimate parent company is headquartered in,
either Macau or a destination specified in Country Group D:5 in certain
destinations) and removes the text from paragraph (i) and adds that
text to new paragraph (a)(3)(i)(A). BIS also amends that paragraph by
excluding 3A090.c from the scope of this end-use license requirement
and revising the parenthetical phrase at the end of the paragraph to
make that example easier to understand. In another conforming change
related to 3A090.c, this IFR adds a new paragraph (a)(3)(i)(B) to
impose an end-use license requirement for ECCN 3A090.c commodities when
there is ``knowledge'' these commodities are destined to any
destination other than Macau or those specified in Country Group D:5,
for an entity that is headquartered in, or whose ultimate parent
company is headquartered in, either Macau or a destination specified in
Country Group D:5. Lastly, this IFR adds a parenthetical phrase with an
application example under new paragraphs (a)(3)(ii) to provide a better
understanding of this provision.
In addition, paragraph (a)(3)(ii) introductory text and paragraph
(a)(ii)(D) of Sec. 744.23 are revised to add an exclusion for 3E001
technology for 3A090.c, because the intent of this end-use control for
certain 3E001 technology is focused, for example, on preventing a PRC
company located in PRC from sending its designs to a logic foundry in a
third country to manufacture 3A090 chips under 3A090.a or .b for the
PRC company. The license review policy for 3A090.c and related
``technology'' and ``software'' destined to Macau, destinations
specified in Country Group D:5, or any entity headquartered in, or with
an ultimate parent headquartered in, either Macau or a destination
specified in Country Group D:5 will be consistent with the current
policy for ECCN 3A090 pursuant to Sec. 744.23(d)(1) of the EAR.
Additional changes to Sec. 744.23 are discussed in section III.B.5 of
this preamble.
This IFR makes a sixth conforming change related to 3A090.c in
Sec. 758.6 (Destination control statement and other information
furnished to consignees). The last sentence of paragraph (a)(2) is
revised by adding .c to the reference to 3A090.a or .b, so it is clear
that, for tangible exports of ECCN 3A090 commodities, 3A090.c needs to
be identified on the commercial invoice, in the same way as 3A090.a or
.b needs to be identified on the commercial invoice.
As the seventh and eighth conforming changes related to 3A090.c,
this IFR revises two ECCNs in the Commerce Control List, 3D001 and
3E001, for the related software and technology controls for 3A090.c to
conform with the revisions to Sec. 742.6 for the RS controls that are
applicable to these related software and technology ECCNs.
Under ECCN 3D001, this IFR revises the RS Controls paragraph in the
License Requirements section to exclude software for 3A090.c from RS
license requirements under Sec. 742.6(a)(6)(iii), consistent with the
exclusion of 3A090.c and 3E001 technology for 3A090.c from the scope of
Sec. 742.6(a)(6)(iii). In addition, this IFR also adds an RS Controls
paragraph in the License Requirements section to reference Sec.
742.6(a)(6)(i), including adding 3A090.c to this RS license requirement
because software for 3A090.c is included in the scope of Sec.
742.6(a)(6)(i). Previously, this RS Controls paragraph that references
Sec. 742.6(a)(6)(i) was not included in the License Requirements
section. To conform with the RS license
[[Page 96802]]
requirements in Sec. 742.6(a)(6)(i), this IFR corrects that omission
by adding this intended RS Controls paragraph, along with including a
reference to new ECCN 3A090.c.
Under ECCN 3E001, this IFR revises the RS Controls paragraph in the
License Requirements section that references Sec. 742.6(a)(6)(iii), to
exclude 3A090.c from this RS license requirement because 3E001
technology for 3A090.c is excluded from the scope of Sec.
742.6(a)(6)(iii). In addition, this IFR adds a new RS Controls
paragraph in the License Requirements section of ECCN 3E001 for 3A090.c
to impose a RS license requirement under Sec. 742.6(a)(6)(i)(B) for
exports, reexports, and transfers to or within Macau or a destination
specified in Country Group D:5 of supplement no. 1 to part 740.
3. Addition of New License Exception HBM for 3A090.c
In part 740 (License Exceptions), this IFR adds a new License
Exception HBM under Sec. 740.25. This IFR adds License Exception HBM
to authorize certain exports, reexports, and transfers (in-country) for
some of the new HBM commodities that this IFR adds to ECCN 3A090.c.
License Exception HBM consists of paragraphs (a) through (e), which
specify the terms and conditions of this new license exception and
create a more efficient authorization for certain exports, reexports,
or transfers (in-country) of these new ECCN 3A090.c commodities that
are in U.S. national security and foreign policy interests. This
license exception authorizes exports, reexports, and transfers (in-
country) when both: (1) the export, reexport, or transfer (in-country)
is completed by and to packaging sites that, even if located within a
country of concern, are owned and operated by U.S. or allied
headquartered companies, alleviating the national security concerns
about those destinations; and (2) where the U.S. or allied
headquartered company carefully tracks the HBM being sent and returned
by the packaging site and resolves discrepancies or report them to BIS.
As a result, the exception helps ensure that national security and
foreign policy considerations are addressed without delaying the
ability of U.S. and allied headquartered companies to continue
operations that do not raise national security or foreign policy
concerns.
Specifically, this IFR adds paragraph (a) (Scope) to specify that
License Exception HBM authorizes the export, reexport, or transfer (in-
country) of items specified in ECCN 3A090.c on the CCL if all terms and
conditions within this section are met.
This IFR adds paragraph (b) (Exporter, reexporter, transferor) to
impose requirements on who may be an exporter, reexporter or transferor
under License Exception HBM. This IFR specifies under paragraph (b)
that the exporter, reexporter, or transferor must be headquartered in
the United States or a destination specified in Country Group A:5 of
supplement no. 1 to part 740, without an ultimate parent headquartered
in Macau or a destination specified in Country Group D:5 of supplement
no. 1 to part 740. No other exporter, reexporter, or transferor may use
License Exception HBM.
This IFR adds paragraph (c) (Conditions) to specify that exports,
reexports, or transfers (in-country) are authorized under this License
Exception HBM only when the 3A090.c item has a memory bandwidth density
less than 3.3 GB/s/mm[supcaret]2. Only HBM at less than this parameter
may be authorized under License Exception HBM. HBM at equal to or
greater than this parameter referenced under paragraph (c) are of
greater sensitivity, so those HBM of greater sensitivity are not
eligible for HBM to ensure U.S. national security and foreign policy
interests are protected. In order to export, reexport, or transfer (in-
country) such HBM, both of the conditions that are specified under
paragraphs (c)(1) and (c)(2) must be met.
New paragraph (c)(1) of License Exception HBM specifies that the
3A090.c items exported, reexported, or transferred to or within Macau
or a destination specified in Country Group D:5 must be directly
purchased by the designer of the co-packaged commodity. Because of the
greater export control concerns with shipments through distributors
related to diversion, this condition ensures that the exporter,
reexporter, or transferor must know who the designer of the co-packaged
commodity is and that the designer is the entity that the co-packaged
commodity is being exported, reexported, or transferred (in-country) to
under License Exception HBM.
New paragraph (c)(2) of License Exception HBM specifies that the
3A090.c items must be shipped directly to the packaging site, which is
included to prevent diversion. HBM are used at packaging sites, so this
condition is intended to further ensure that the HBM are being
exported, reexported, or transferred (in-country) directly to the end
user and not to other parties that would pose a greater risk of
diversion.
Paragraph (c)(2)(i) of License Exception HBM applies to 3A090.c
items that are destined for packaging at a U.S.- or Country Group A:5
or A:6-headquartered packaging site without an ultimate parent
headquartered in Macau or a destination specified in Country Group D:5
and meet the additional conditions this IFR adds under paragraph
(c)(2)(i)(A) and (B). New paragraph (c)(2)(i)(A) specifies that the
packaging site must confirm in writing to the producer of the chips
that the 3A090.c item was packaged and exported, reexported, or
transferred (in-country) to the specified designer of the co-packaged
commodity. The second sentence to paragraph (c)(2)(i)(A) specifies that
this confirmation is considered an ``export control document'' and is
subject to recordkeeping requirements in part 762. New paragraph
(c)(2)(i)(B) specifies that the co-packaged commodities must not exceed
the technical thresholds in ECCN 3A090, unless packaging the item is
permitted under the TGL specified in paragraph (d) of General Order No.
4 in of supplement no. 1 to part 736. This condition under paragraph
(c)(2)(i)(B) is excluded because there is greater export control
concern if a 3A090.c item is being incorporated into a 3A090.a or
3A090.b commodity, unless that activity is within the scope of the TGL.
Paragraph (c)(2)(ii) of License Exception HBM specifies that if the
3A090.c items are destined for packaging at any other packaging site,
then the co-packaged commodities must be sent back to the exporter,
reexporter, or transferor for export, reexport, or transfer (in-
country) to the purchaser and meet the additional conditions under new
paragraphs (c)(2)(ii)(A) and (B). New paragraph (c)(2)(ii)(A) specifies
that upon receipt of the co-packaged commodities, the exporter,
reexporter, or transferor must confirm the number of 3A090.c units
contained within the co-packaged chips received from the packaging site
matches the number of 3A090.c items exported, reexported, or
transferred (in-country) to the packaging site. Similar to the text
this IFR adds to paragraph (c)(2)(i)(A), this IFR adds a second
sentence to paragraph (c)(2)(ii)(A) to specify that this confirmation
is considered an ``export control document'' and is subject to
recordkeeping requirements in part 762. As with all export control
records, the IFR specifies under paragraph (c)(2)(ii)(A) that a copy of
this record must be provided to BIS upon request. Paragraph
(c)(2)(ii)(B) specifies that the co-packaged commodity must not exceed
the technical thresholds in ECCN 3A090.a or 3A090.b. This is necessary
because the logic die co-packaged with the HBM may still
[[Page 96803]]
exceed the TPP or performance density thresholds in 3A090.a or 3A090.b.
This IFR adds paragraph (d) (Restrictions) to specify certain
exports, reexports, or transfers (in-country) of 3A090.c items that are
not authorized under this License Exception HBM when specified under
paragraphs (d)(1), (2), or (3). New paragraph (d)(1) excludes exports,
reexports or transfers (in-country) to distributors. New paragraph
(d)(2) excludes exports, reexports, or transfers (in-country) to
intermediate consignees, unless hired by the packaging site for freight
forwarding or customs clearance. New paragraph (d)(3) excludes exports,
reexports, or transfers (in-country) to co-packaging at a ``facility''
located in Macau or a destination specified in Country Group D:5 where
``production'' of ``advanced-node ICs'' occurs. These three
restrictions specified under paragraphs (d)(1) through (3) are needed
to ensure the exports, reexports, and transfers (in-country) authorized
under License Exception HBM will not be diverted contrary to U.S.
national security and foreign policy interests.
This IFR adds paragraph (e) (Reporting requirement) to specify that
in the event that the exporter, reexporter, or transferor identifies a
discrepancy of greater than 1 percent between the number of 3A090.c
units exported, reexported, or transferred (in-country) to the
packaging site and the number of 3A090.c units contained within the co-
packaged commodities received from the packaging site under paragraph
(c)(2)(A) of this section, this generates a `Red Flag' that must be
resolved before exporting, reexporting, or transferring (in-country)
the co-packaged commodities to the designer of the co-packaged
commodities or engaging in any further exports, reexports, or transfers
(in-country) of 3A090.c items to the designer of the co-packaged
commodities or packaging site involved in the transaction that raised
the Red Flag. The IFR adds a second sentence to the introductory text
of paragraph (e) to specify that if the Red Flag cannot be resolved,
then within 60 days of identifying the discrepancy, the exporter,
reexporter, or transferor must report the information in new paragraph
(e)(1) to BIS on the unresolved Red Flag, following the requirements
under paragraph (e)(2).
New paragraph (e)(1) (Information required) specifies under
paragraphs (e)(1)(i) through (vi) the information that needs to be
reported to BIS. Specifically, paragraphs (e)(1)(i) through (e)(vi)
specifies that the following information must be reported to BIS: (i)
the date of shipment; (ii) the quantity shipped, and quantity returned;
(iii) the name of Consignee or designer of the co-packaged commodities;
(iv) the name and address of the packaging site; (v) the end use; and
(6) an explanation of measures already taken or planned to resolve the
Red Flag.
New paragraph (e)(2) (Submission requirements) specifies that
reports must be provided in electronic form. Paragraph (e)(2) specifies
that the recommended file formats for electronic submission include
spreadsheets, tabular text, or structured text. Paragraph (e)(2) allows
for submitters of such reports to request other reporting arrangements
with BIS to better reflect their business models. Lastly, paragraph
(e)(2) specifies that reports are to be sent electronically to BIS at
the email address: <a href="/cdn-cgi/l/email-protection#8ec6ccc3dcebfee1fcfafdceece7fda0eae1eda0e9e1f8"><span class="__cf_email__" data-cfemail="eaa2a8a7b88f9a85989e99aa888399c48e8589c48d859c">[email protected]</span></a> with the email subject line
Attn: LE HBM Discrepancy Reports. These changes are expected to result
annually in an increase of 10 notifications to BIS under License
Exception HBM.
As a conforming change for the addition of License Exception HBM,
this IFR revises section 740.2(a)(9)(ii) to add the phrase ``HBM under
the provisions of Sec. 740.25'' to specify this is an additional EAR
license exception that may overcome the general restriction, even
though License Exception HBM is only available for ECCN 3A090.c. This
IFR also adds a new Note to paragraph (a)(9)(ii) to provide guidance on
why ECCN 3A090.c is included within the scope of this paragraph even
though the destination scope referenced in this paragraph is broader
than the destination scope of license requirements for 3A090.c. This
new Note specifies under the first sentence that ECCN 3A090.c requires
a license for exports, reexports, transfers (in-country) to or within
Macau or Country Group D:5 but is still included within the scope of
this paragraph because it generally shares the same EAR license
exception eligibility as other 3A090 commodities. The last sentence of
this note specifies that an export, reexport, or transfer (in-country)
of an ECCN 3A090.c commodity to a destination specified in Country
Groups D:1 or D:4 that is not specified in Country Group D:5, may be
made under the No License Required (NLR) designation, provided no part
744 or 746 license requirements are applicable.
As a conforming change for the addition of License Exception HBM,
in Sec. 762.2 (Records to be retained) this IFR revises paragraph (b)
(Records retention references) to add a new paragraph (b)(56) to
reference Sec. 740.25, License Exception HBM as a new record retention
reference. This change is a conforming change with the addition of
License Exception HBM and the new reporting requirement under Sec.
740.25(e), which is considered an ``export control record'' for
purposes of the EAR and must be kept in accordance with the
requirements of part 762 of the EAR.
D. Clarification to the EAR: Software Keys
This IFR also clarifies the export controls that apply to the
export, reexport, and transfer (in-country) of software keys that allow
access to the use of certain software and hardware. This IFR revises
existing Sec. 734.19 (Transfer of access information) by redesignating
the existing introductory text of the section as new paragraph (a) and
adding a new paragraph (b), including adding a new Note 2 to paragraph
(b), to describe the export control treatment of software license keys.
This clarification adds software keys, or software license keys, to
new paragraph (b) in Sec. 734.19(b). These keys allow the use of
specific ``software'' (e.g., to ``unlock'' the use of the software or
hardware) and software keys that allow the renewal of existing software
and hardware use licenses, thereby allowing the use of the ``software''
or hardware by the licensed end user.
Prior to this rule, the introductory text to Sec. 734.19 described
the transfer of ``access information'' only and did not otherwise
address the export control status of software license keys that allow
access but are not ``access information'' as defined in part 772 of the
EAR. In this IFR, BIS is clarifying the scope of Sec. 734.19 by adding
a new paragraph (b) to specify the EAR treatment of software keys. To
implement these changes, this IFR makes the following revisions:
To reflect the clarification of the intended scope of Sec. 734.19,
this IFR revises the heading of the section to read as ``Transfer of
access information and export, reexport, and transfer (in-country) of
software keys,'' so that it is clear that this section applies to both
transfer of access information now described under paragraph (a) and
the export, reexport, and transfer (in-country) of software keys
described under new paragraph (b) that this IFR adds to this section.
This IFR redesignates the existing text of Sec. 734.19 as new
paragraph (a). This IFR as a conforming change redesignates Note 1 to
Sec. 734.19 as new Note 1 to Sec. 734.19(a).
New paragraph (b) is added to specify that software keys, also
called software license keys, which allow users the ability to use
``software'' or hardware by
[[Page 96804]]
providing access to it, and software keys that renew existing
``software'' or hardware use licenses, are classified and controlled
under the same ECCNs on the CCL as the corresponding ``software'' or
hardware to which they provide access, or in the case of hardware, the
software key would be classified under the corresponding ECCN in the
software group (e.g., a software license key that allows the use of
hardware classified under ECCN 5A992 would be classified under ECCN
5D992). This clarification is needed to inform exporters, reexporters,
and transferors of the EAR's approach to software keys.
If authorization is required for the export, reexport, or transfer
(in-country) of the ``software'' or hardware, authorization is likewise
required for the software key. For example, if a license is required to
export ECCN 5D992 software to an entity listed on the Entity List (see
supplement no. 4 to part 744 of the EAR), a license is also required to
release the associated software key that allows the entity access to
that ``software.'' Importantly, this would apply even if the listed
entity already had previous access to the ``software'' in question but
needs a software key for current or future access to the ``software.''
Additionally, if authorization via an export license is obtained
for the export, reexport, or transfer (in-country) of the ``software''
or hardware, that license also authorizes the export, reexport, or
transfer (in-country) to the corresponding software license key,
consistent with the terms and conditions set forth in the license. The
license would continue to authorize access to the use of the
``software'' or hardware (not upgrades) until the license expires,
provided the license did not specifically exclude such a release of the
software license key, or require separate authorization for the
software key.
If no authorization was required for the initial export of the
``software'' or hardware and the associated software key, but a license
requirement is later imposed on the ``software'' or hardware (e.g., a
license requirement is imposed because the end user becomes listed on
the Entity List), then subsequent exports, reexports, or transfers (in-
country) of the ``software,'' hardware, and the software license key
are subject to the new license requirement. This clarifies the
application of paragraph (b) requirements when a change in the license
requirement occurs between the initial export, reexport, or transfer
(in-country) of the ``software'' or hardware, and the release of the
software license key to access it.
Note 2 to paragraph (b) is added in Sec. 734.19 to clarify that
paragraph (b) does not impact keys that unlock dormant functionality in
a controlled item. Note 2 to paragraph (b) addresses items with dormant
functionality that can be activated using a license key. This typically
occurs when an item is already activated and useable, but a customer
wants to purchase and add additional features. In some cases, those
additional features take an item from an uncontrolled to a controlled
state, or from a lower to a higher control (e.g., an AT-controlled item
becomes NS-controlled). BIS has existing policies on the way it treats
such a scenario that vary by category. The purpose of Note 2 to
paragraph (b) is to make it clear that this rule is not intended to
impact those existing policies.
As a conforming change, this IFR also revises the definition of
``access information'' in part 772 to specify that the definition of
``access information'' applies only to Sec. 734.19(a), and not to
Sec. 734.19(b).
Instructions for submission of comments, including comments that
contain business confidential information, are found in the ADDRESSES
section of this IFR. BIS is requesting comments on whether the
revisions promulgated in this IFR effectively describe the treatment of
software keys, that allow users the ability to use the ``software'' and
hardware, and software keys that renew existing ``software'' use
licenses. Additionally, whether BIS should address the export control
status of other types of keys and software access control mechanisms
under the EAR. BIS will also accept comments on the relationship
between the treatment of software keys as described in new Sec.
734.19(b) and the treatment of keys that activate new dormant
functionality in ``software'' or hardware that has already been
activated.
E. Revisions to the Commerce Control List
1. Revisions to 3B001
This rule revises 3B001 by adding ``oxygen'' to paragraph 3B001.a.2
to implement a revision of a WA agreement. Oxygen is added due to
recent developments in the epitaxial growth rate of gallium oxide in
metal organic chemical vapor deposition (MOCVD) systems. Double quotes
are added around the word ``production'' in Technical Note 1 to
paragraph 3B001.e to indicate it is a defined term in Sec. 772.1 of
the EAR.
This section discusses the amendments to ECCN 3B001 other than the
commodities moved to new ECCN 3B993, discussion of which is found in
Section D.4 of the rule. No changes were made to ECCN 3B001 paragraphs
.b, or .g through .n.
The ECCN 3B001 paragraphs amended and added in this rule are
controlled for NS and RS reasons, as identified in Sec. Sec.
742.4(a)(4) (NS) and 742.6(a)(6) (RS), which applies only to Macau and
destinations specified in Country Group D:5. The entire entry is also
controlled for anti-terrorism (AT) reasons and subject to an AT:1
license requirement. The License Requirement table is revised as needed
to identify these reasons for control.
3B001.a.4 is updated as follows. The list of epitaxy materials is
updated to only specify silicon and silicon germanium, but not carbon
doped silicon. Carbon doped silicon epitaxy is still included under
silicon epitaxy. The parameter specifying the chamber atmosphere has
been removed. The parameter specifying temperature is updated to
reflect that it refers to the chamber temperature, and the temperature
value is converted from degrees Celsius to Kelvin. These changes are
made to ensure that all systems capable of achieving similar epitaxial
performance are specified regardless of their architecture or
configuration. These changes are not intended to alter the original
scope of control as published in October 2023, and BIS welcomes
feedback on whether any fewer or additional systems are specified by
the updated control text.
3B001.c.3 controls the etch equipment used to package a chip
containing a through-silicon via (TSV) (e.g., a HBM chip). The
equipment specified by 3B001.c.3 performs a ``reveal etch,'' which
removes silicon from the backside of the wafer and ``reveals'' the vias
for subsequent packaging steps. To perform this process in high-volume
manufacturing and at a high yield, this equipment employs endpoint
detection to remove a highly precise thickness of material as well as
``process uniformity tuning,'' which is defined in the Technical Note
to 3B001.c.3 to refer to the ability to compensate for incoming wafer
thickness variation caused by the wafer grinding process.
3B001.c.4 controls etch equipment designed to create TSVs, which
are formed by first etching a high-aspect ratio hole. This control
specifies equipment designed for TSV etch with an aspect ratio of
greater than or equal to 10:1, which BIS believes describes the TSVs
used in advanced packaging applications, but not the TSVs used in
legacy processes. The control further specifies that the equipment
produces low non-uniformity (less than 2%) and
[[Page 96805]]
a high etch rate (greater than 7 microns per minute), which are
important to maintain the throughput and yield necessary for high-
volume manufacturing. BIS notes that 3B001.c.4 items are listed under
3B001 to reflect that they are subject to a destination-based license
requirement for destinations specified in Country Group D:5 or Macau.
If Sec. 744.23 does not apply, applications will be reviewed on a
case-by-case basis if no license would be required under any other
provision of part 744 of the EAR.
3B001.d.3 is updated to specify that the plasma process described
in d.3.b is a surface treatment.
3B001.d.4 and 3B001d.12 are updated to remove the specification
that the transfer chamber or wafer handling system must maintain high
vacuum (equal to or less than 0.01 Pascal (Pa)) or inert environment
between process steps. This change is made to ensure relevant systems
are specified based on their performance criteria (listed in the ECCN
sub-paragraphs), rather than transfer pressure, which may vary from
system to system.
3B001.d.5 is updated to change the specification of the carbon hard
mask to being more than 2 [mu]m thick and have a density greater than
1.7 grams per cubic centimeter (g/cm[supcaret]3).
3B001.d.11: The parameters in this paragraph do not control the
targeted SME, but 3B001.d.7, 3B001.d.8 and 3B001.10 do. Therefore, the
control text is removed, and the paragraph is reserved.
3B001.d.14 has been updated to control a narrower set of equipment
by specifying that the properties of the deposited film must have a
lower dielectric constant and be deposited in features with a smaller
lateral opening and smaller feature-to-feature pitch. As described
below, the new paragraph 3B993.d.1 is created to be largely similar to
the former paragraph 3B001.d.14.
The control text for former paragraph 3B001.d.16 has been moved to
the new paragraph 3B993.d.2, as described below. Therefore, the control
text is removed, and the paragraph is reserved.
New paragraph 3B001.d.17 controls equipment used for depositing
dielectric material between the metal lines of advanced ICs. This
material must have very low dielectric constant (low-k). Unlike control
3B001.d.15--which controls equipment that produces low-k films as-
deposited--3B001.d.17 controls films that achieve a low k after curing
with ultraviolet (UV) light. This UV curing is typically necessary for
achieving the dielectric constants necessary for ``advanced-node ICs.''
This equipment uses a plasma-enhanced chemical vapor deposition
process, which allows the substrate to be kept at a temperature below
500 degrees Celsius ([deg]C). The most advanced equipment also includes
the curing capability in the same platform as the deposition chamber to
avoid exposing the deposited film to moisture in-transit between
different platforms. Finally, this control specifies the geometry of
the deposited film to be consistent with the advanced metal layers of
advanced IC production nodes (thickness between 6 nanometers (nm) and
20 nm at an aspect ratio greater than or equal to 1:1.8, and a metal
pitch less than 24 nm).
New paragraph 3B001.d.18 expands on the existing controls on
equipment that deposits low-resistivity metals used in advanced memory
integrated circuits. Namely, this expands on the controls on molybdenum
and ruthenium beyond controls 3B001.d.12.b and 3B001.d.13,
respectively. 3B001.d.18 includes deposition techniques that utilize a
reducing agent, rather than keeping the chamber under vacuum.
Additionally, the control does not specify the type of precursor, but
instead specifies a precursor temperature above 75[deg]C. 3B001.d.18
also includes a note to specify that the metal precursor could be
located on the tool or elsewhere in the facility in a sub-fab. In some
cases, a fabrication facility will separate out toxic materials from
the main fabrication facility, instead placing them in a dedicated
``sub-fab.''
The new 3B001.d.19 controls equipment designed or modified for
depositing insulators used in advanced DRAM. As memory cells shrink,
the DRAM cell's capacitor needs to use an insulator with a higher
dielectric constant to compensate for its decreased size. 3B001.d.19
controls equipment that deposits material in very high aspect ratio
features (greater than 200:1, characteristic of 3D DRAM technology).
Additionally, 3B001.d.19 specifies the materials and processes used in
practice to achieve this deposition in high volume manufacturing.
Namely, the control specifies materials that require two metal
precursors and result in a film with a very high dielectric constant
(greater than 40). It further specifies that the two metal precursors
are delivered through direct liquid injection, which is a technique
that allows low-volatility precursors to achieve sufficient vapor
pressure to efficiently deposit on the large surface areas present in
high aspect ratio features. Also see the related control in the new
paragraph 3B993.d.4.
The new 3B001.d.20 is created to control certain physical
deposition equipment having electromagnets and being ``specially
designed'' for depositing tungsten into features with a specified
geometry. This equipment enables the creation of pure tungsten metal
contacts to overcome resistance challenges in the production of
``advanced-node ICs.''
3B001.e.1 is updated to include 3B001.a., .b, and .c and .d,
because all of these `semiconductor processing tools' all have the same
configuration.
3B001.f.1.b is updated to remove the parameter f.1.b.2.b. Items
previous controlled by this parameter are now controlled under the new
3B993.f.1.b.
The new 3B001.f.5 controls nanoimprint lithography equipment
capable of producing ``advanced-node ICs.'' To accomplish this, the
equipment must have a small overlay accuracy, in this control an
overlay accuracy less than 1.5nm. BIS has also created a related new
control on less advanced nanoimprint lithography, paragraph 3B993.f.2,
described below.
3B001.o.1 and 3B001.o.2 are moved to the new paragraphs 3B993.o.1.a
and o.1.b. Therefore, the control text is removed, and the paragraph is
reserved.
New paragraph 3B001.p.4 controls single wafer cleaning equipment,
which is required for advanced processes due to the need for higher
control over variables like contamination compared to batch cleaning
systems. 3B001.p.4 expands on former 3B001.p.3 (current 3B993.p.3) by
removing the ``surface modification drying'' parameter. That technique
can be challenging to use for the most advanced processes due to
pattern collapse from surface tensions. 3B001.p.4 controls an
alternative technique, supercritical or sublimination drying using
carbon dioxide (CO<INF>2</INF>).
3B001.r.is created to control equipment designed for deposition or
removal processes that improve the overall patterning achieved by EUV
lithography. See the Crosswalk for ECCN 3B001 commodities that moved to
New ECCN 3B993 under section III.D.4 for additional context on these
movements.
2. Revisions to 3B002
ECCN 3B002 is amended by removing 3B002.b from certain license
requirements in the license requirements table. The License Exception
LVS paragraph is revised by removing the exclusion for 3B002.b.
Additionally, ECCN 3B993 is added to the related controls for ECCN
3B002.
3. Revision of ECCNs 3B991 and 3B992
This IFR revises the headings of ECCN 3B991 and 3B992 to add ECCNs
3B993 and 3B994 to the equipment not
[[Page 96806]]
controlled by ECCNs 3B991 or 3B992. While ECCNs 3B993 and 3B994 may
have similar control parameters, they have a higher RS reason for
control than ECCNs 3B991 and 3B992, which are controlled for AT
reasons. Therefore, these revisions were made in order to maintain the
correct order of review.
4. Addition of ECCN 3B993
This IFR adds new ECCN 3B993 to specify items that enable
``advanced-node IC'' production, but which BIS believes also have
legitimate applications in non-advanced-node production, and thus do
not warrant nationwide license requirements or a presumption of denial.
These items are differentiated from those in the ECCN 3B001 item
paragraphs described above, which now specify items that are not only
enabling ``advanced-node IC'' production but used exclusively or
designed specifically for that purpose.
Crosswalk for ECCN 3B001 Commodities That Moved to New ECCN 3B993
----------------------------------------------------------------------------------------------------------------
3B001 Description 3B993
----------------------------------------------------------------------------------------------------------------
c.1.b................................. High-aspect ratio etch.................. c.1.
d.14.................................. Remotely-generated radical assisted d.1.
dielectric deposition.
d.16.................................. Dielectric deposition................... d.2.
f.1.b.2.b............................. Less-advanced DUV photolithography f.1.b.2.
equipment.
o.1 and o.2........................... Annealing equipment..................... o.1 and o.2.
p.1 and p.3........................... Cleaning equipment...................... p.1 and p.3.
----------------------------------------------------------------------------------------------------------------
Seven commodities are moved from former ECCN 3B001 paragraphs into
the new ECCN 3B993, due to their node-agnostic nature and established
usage in non-advanced-node fabrication applications. These include
commodities in former paragraphs 3B001.c.1.b (high-aspect ratio etch),
3B001.d.14 (remotely-generated radical assisted dielectric deposition),
3B001.d.16 (dielectric deposition), 3B001.f.1 (less-advanced DUV
photolithography equipment), 3B001.o.1 (annealing equipment), and
3B001.p.1 and p.3 (cleaning equipment). BIS has also added several
other commodities to new 3B993 ECCNs.
New paragraph 3B993.b.1 augments existing controls on ion
implantation in 2B005.b, 3B001.b, and 3B991.b.1.g. 3B993.b.1 controls
equipment that performs ``plasma doping,'' which enables dopant atoms
to be deposited into the sidewalls of 3D structures like FinFETs and
GAAFETs. This control also specifies several properties of the
equipment, including the wafer size it can accept (300 mm diameter),
power sources it uses (at least one radio frequency source and at least
one pulsed direct current source), and the atomic species it can
implant (namely, n-type or p-type dopants, which are the atomic species
used to tune the electrical properties of semiconductor material).
3B993.c.1 (formerly 3B001.c.1.b) controls certain equipment
designed or modified for anisotropic dry etching. Atomic layer etching
enhanced by the features described in 3B993.c.1 produce the vertical
edges required in high-quality, leading-edge advanced devices and
structures, including GAAFET and similar 3D structures. This control
includes a Note to inform the public that 3B993.c.1 includes etching by
`radicals', ions, sequential reactions, or non-sequential reactions. In
addition, it includes a Technical Note to define the term `radical'
used in the Note.
3B993.c.2 controls etch equipment used in the fabrication of
dynamic random access memory (DRAM) chips. As the size of DRAM cells
decrease, the lateral dimensions of all the features within the memory
cell also need to shrink. Crucially, this involves shrinking the
diameter of the capacitor used to store the bit of information
contained in the cell. One step in fabricating this capacitor is
etching a high-aspect ratio feature into a dielectric material.
Accordingly, the control focuses on equipment that can etch dielectric
materials to an aspect ratio of greater than 30:1. Furthermore, it
specifies the equipment can create openings with a lateral dimension
less than 40 nm (necessary for capacitors that fit in a single advanced
DRAM memory cell). This control also contains a Note to specify that it
does not apply to equipment designed for wafer diameters less than 300
mm.
3B993.c.3 expands on the control in 3B001.c.1.c by broadening the
scope of the fast gas switching time (from 300 milliseconds (ms) to 500
ms), and the individually controllable variable temperature elements in
the electrostatic chuck (from 20 to 10). 3B993.c.3 will not control
equipment already controlled by 3B001.c.1.c.
3B993.d.1 (derived from former 3B001.d.14) controls equipment for
depositing films in features with certain geometry and a specified
dielectric constant. This is an update to the former 3B001.d.14 control
by redesignating this equipment specified under new 3B001.d.14 and
specifying that the aspect ratio in 3B993.d.1.b describes the features.
These changes are made to differentiate license requirements for more
(3B001.d.14) versus less (3B993.d.1) advanced dielectric deposition
equipment.
3B993.d.2 (formerly 3B001.d.16) controls deposition for silicon and
carbon containing films while meeting certain temperature requirements,
having the capability to hold multiple vertically stacked wafers, and
having certain injector configurations, as specified.
3B993.d.3 controls equipment designed for chemical vapor deposition
(CVD) of carbon hard masks. This expands on 3B001.d.5--which controls
plasma-enhanced CVD (PECVD) of carbon hard masks--to encompass other
CVD techniques and resulting film properties. Carbon hard masks are
critical for multipatterning processes, with higher density masks
providing better etch selectivity and pattern fidelity, enabling the
creation of smaller features on the wafer.
3B993.d.4 (related to new 3B001.d.19) controls equipment designed
for depositing the insulators used in advanced DRAM production. As
memory cells shrink, the DRAM cell's capacitor needs to use an
insulator with a higher dielectric constant to compensate for its
decreased size. It further specifies that this equipment can deposit
material on very high aspect ratio features (greater than 50:1,
characteristic of advanced DRAM). Additionally, 3B993.d.4 specifies the
materials and processes used in practice to achieve this deposition in
high volume manufacturing. Namely, the control specifies materials that
require two metal precursors and result in a film with a high
dielectric constant (greater than 35). It further specifies that the
two metal precursors are delivered through direct liquid injection.
3B993.f.1 (formerly part of 3B001.f.1) reflects the scope of former
3B001.f.1.b.2.b, which specified certain
[[Page 96807]]
less-advanced DUV photolithography equipment. Equipment meeting the
parameters in 3B993.f.1 is not eligible for de minimis treatment, with
one exception as set forth in Sec. 734.4(a)(3) of the EAR, as
described below in Section B.1.
3B993.f.2 controls nanoimprint lithography equipment capable of
producing ``advanced-node ICs.'' This control specifies it controls
equipment with an overlay accuracy between 1.5 nm and 4.0 nm. Also see
the related new control on nanoimprint lithography, 3B001.f.5.
3B993.f.3 specified commodities designed or modified to improve the
productivity of controlled DUV photolithography equipment. BIS has also
added similar controls in 3D993 and 3E993 that cover ``software'' and
``technology'' for the ``development'' or ``production'' of commodities
specified by 3B993, which is intended to restrict ``software'' or
technology'' that could modify or improve DUV photolithography
equipment.
3B993.o.1 (formerly 3B001.o) controls certain annealing equipment
for reflow of copper, cobalt, and tungsten. The scope of control is
unchanged.
3B993.o.2 is created to control certain equipment designed for
annealing semiconductors. Annealing is an essential step used to modify
the electrical properties of semiconductor material to be useful in
transistors. This control is targeted at the ``millisecond spike
annealing'' technology, which is used in advanced node semiconductor
fabrication. Millisecond spike annealing allows for precise control of
dopant activation and diffusion, with the ``spike'' referring to the
extremely short duration during which the wafer is heated to the
desired temperature. This brief, intense heating allows for dopant
activation while minimizing unwanted diffusion, which is critical for
creating advanced semiconductors. This control covers both lamp-based
and laser-based millisecond spike annealing systems, as both can
achieve rapid heating and cooling required for this process. 3B993.o.2
includes a Technical Note that `duration' is the period of time (i.e.,
total elapsed time) the wafer is above the stated temperature.
3B993.p is created to control removal and cleaning equipment
3B993.p.1 (formerly 3B001.p.1) controls equipment designed for removing
polymeric residue and copper oxide film and enabling deposition of
copper metal in a vacuum (equal to or less than 0.01 Pa) environment.
3B993.p.3 (formerly 3B001.p.3) controls equipment designed for dry
surface oxide removal preclean or dry surface decontamination. BIS
notes that this control does not capture deposition equipment not
elsewhere specified, but which may also have the capability described
in the control.
3B993.q.1 is created to control metrology and inspection equipment
for use with patterned 300 mm semiconductor wafers, including equipment
employing either optical or electron beam techniques. It specifies the
equipment must be designed or modified to detect defects equal to or
smaller than 21nm, which BIS believes is critical for advanced-node
production applications. This control also specifies properties of the
source. For optical equipment (including broadband plasma equipment),
it specifies the wavelength must be less than 400 nm, but BIS notes
that this requirement would be met by equipment that can be tuned to a
wavelength both below and above 400 nm. For electron beam equipment, it
specifies the system must have a resolution less than or equal to
1.65nm, or certain properties for its electron beam source (i.e., a
cold field emission source, or two sources of any type).
3B993.q.2 controls metrology equipment that can improve the overlay
accuracy of photolithography equipment. Overlay accuracy is important
for multipatterning, a process which enables legacy photolithography
machines to create ``advanced-node ICs.'' 3B993.q.2 focuses on two
types of machines. 3B993.q.2.a controls machines that measure wafer
shape (typically used to feedforward measurements to lithography
machines). 3B993.q.2.b controls machines that measure focus and overlay
after resist development (typically used for feedback to a lithography
machines). 3B993.q.2.a controls only standalone equipment (not
equipment integrated into the lithography machines itself), whereas
3B993.q.2.b controls machines designed for integration to a track
(which maximizes throughput). 3B993.q.2.b also specifies that the
machine must have fast wavelength switching functionality and an
overlay measurement accuracy better than 0.5 nm. 3B993.q.2 also
includes Technical Notes to clarify the terminology in the control.
Namely, these specify that, for the purposes of 3B993.q.2, a `track' is
equipment designed for coating and developing photoresist formulated
for lithography, and `fast wavelength switching functionality' means
the equipment can the change the measurement wavelength and acquire a
measurement in less than 25 ms.
5. Addition of ECCN 3B994
Similar to ECCN 3B993, BIS has added new ECCN 3B994 to specify
items that can support ``advanced-node IC'' ``production,'' but which
BIS believes also have legitimate applications in non-advanced-node
production, and thus do not warrant nationwide license requirements or
a presumption of denial. ECCN 3B994 will be continually evaluated to
determine if additions, revisions, or removals are needed. ECCN 3B994
is controlled for RS and AT reasons; for the former, see Sec.
742.6(a)(11) and (b)(12) of the EAR.
3B994.b.2 controls certain ion implantation equipment. 3B994.b.2.a
controls low- and medium-current ion implantation equipment. This
equipment is used in advanced processes to maintain low damage and high
uniformity on the smallest transistors fabricated in advanced
production. 3B994.b.2.b controls high energy, low current systems which
can implant dopants at a shallow depth below the surface of the wafer,
which is used in some advanced processes. 3B994.b.2.c. controls systems
that can maintain a high angular accuracy between the ion beam and the
substrate, which is used to implant the non-planar transistor
structures used in ``advanced-node ICs.''
3B994.q.3 controls equipment that uses optical measurement
techniques and advanced software to determine the three-dimensional
structure of patterns on a semiconductor wafer. Such techniques can be
used to monitor and optimize process to fabricate the non-planar
transistors used in ``advanced-node ICs.''
6. Revision to ECCN 3D002
This IFR is removing the SME previously added to the license
requirements of ECCN 3D002 and revising it to align with typical
controls applied to Wassenaar Dual-Use List entries. The NS column 1
license requirement no longer only applies to certain SME, but now
applies to the entire entry. The NS and RS license requirements for
3B001.a.4, c, d, f.1. b, j to p, 3B002.b and c, to Macau and
destinations in Country Group D:5 are removed, because the WA control
is broader. The RS control is not necessary, because this entry is
controlled by a multilateral regime.
7. Addition of ECCN 3D992
BIS has added new ECCN 3D992 to control software for specified SME.
3D992.a controls ``software'' for the ``development'' or
``production,'' of
[[Page 96808]]
commodities specified in 3B001.a.4, c, d, f.1, f.5, k to n, p.2, p.4,
r, or 3B002.c. In addition, 3D992.b is added to control electronic
computer-aided design (ECAD) software for advanced semiconductor
packaging involving multiple chips or chiplets co-packaged in a single
device. This software must support complex 3D floorplans and must
conduct advanced simulations to detect and mitigate potential signal
degradation and electromagnetic interference. The control also includes
a Technical Note to specify that `multi-chip' includes both multi-die
and multi-chiplet.
8. Addition of ECCN 3D993
ECCN 3D993.a is added to control ``software'' for the
``production'' and ``development'' of commodities in ECCN 3B993.
Paragraph 3D993.b controls `Electronic Computer-Aided Design' (`ECAD')
``software'' designed or modified for the ``development'' or
``production'' of integrated circuits using multipatterning. Paragraph
3B993.c controls computational lithography software, which enables
fabrication facilities to decrease their minimum resolvable feature
size through techniques such as optical proximity correction, inverse
lithography, and hotspot correction. In some cases, this software acts
as a digital model of the fabrication facility, allowing for very
precise optimization of the fabrication process. Existing controls are
limited to computational lithography equipment specifically for EUV,
but computational lithography software that is not currently controlled
can improve the minimum feature size achievable with DUV to less than
40nm and can facilitate the complex mask decomposition necessary for
multipatterning. ECCN 3B993.d is added to control software designed or
modified to improve the productivity of controlled DUV photolithography
equipment. This addition addresses that potential workaround. 3D993
also includes a technical note which defines `computational
lithography'.
9. Addition of ECCNs 3E992 and 3E993
This IFR adds ECCN 3E992 to control ``technology'' for the
''production'' or ``development'' of commodities specified in
3B001.a.4, c, d, f.1, f.5, k to n, p.2, p.4, r; and 3B002.c to or
within Macau or a destination specified in Country Group D:5 of
supplement no. 1 to part 740 of the EAR (see Sec. 742.4(a)(4) and
Sec. 742.6(a)(6)(i) of the EAR). This rule also moves the worldwide NS
and RS controls for ``software'' for equipment controlled by
3B001.c.1.a or c.1.c from ECCN 3E001 to ECCN 3E992, as well as the
License Exception IEC paragraph.
This rule adds ECCN 3E993.a to control ``technology'' for the
``development'' or ``production'' of commodities specified in 3B993
(see Sec. 742.6(a)(11) and (b)(12) of the EAR). ECCN 3E993.b is added
to control ``technology'' designed or modified to improve the
productivity of controlled DUV photolithography equipment.
10. Addition of ECCNs 3D994 and 3E994
This IFR adds ECCNs 3D994 and 3E994 to the CCL to control
``software'' and ``technology'' for the ``development'' or
``production'' of commodities specified in ECCN 3B994. These ECCNs will
be controlled for RS and AT reasons; for the former, see Sec.
742.6(a)(11) and (b)(12) of the EAR.
IV. Public Comments
BIS welcomes comments from the public on these additional changes
and clarifications made to Sec. 744.23(a)(4), as well as for any of
the other changes included in this IFR.
V. Savings Clauses
<bullet> Savings clause for amendatory instructions 4, 5, 15, 16,
17, 19, 20, 21, 23, 25, 29, and 31: For changes in amendatory
instructions 4, 5, 15, 16, 17, 19, 20, 21, 23, 25, 29, and 31,
shipments of items removed from eligibility for a License Exception or
export, reexport, or transfer (in-country) without a license (NLR) as a
result of this regulatory action that were en route aboard a carrier to
a port of export, reexport, or transfer (in-country), on January 6,
2025, pursuant to actual orders for export, reexport, or transfer (in-
country) to or within a foreign destination, may proceed to that
destination under the previous eligibility for a License Exception or
export, reexport, or transfer (in-country) without a license (NLR),
provided the export, reexport, or transfer (in-country) is completed no
later than on February 3, 2025.
<bullet> There is no savings clause for other amendatory
instructions in this IFR.
VI. Export Control Reform Act of 2018
On August 13, 2018, the President signed into law the John S.
McCain National Defense Authorization Act for Fiscal Year 2019, which
included the ECRA (codified, as amended, at 50 U.S.C. 4801-4852). ECRA
provides the legal basis for BIS's principal authorities and serves as
the authority under which BIS issues this rule. In particular, and as
noted elsewhere, Section 1753 of ECRA (50 U.S.C. 4812) authorizes the
regulation of exports, reexports, and transfers (in-country) of items
subject to U.S. jurisdiction. Further, Section 1754(a)(1)-(16) of ECRA
(50 U.S.C. 4813(a)(1)-(16)) authorizes, inter alia, the establishment
of a list of controlled items; the prohibition of unauthorized exports,
reexports, and transfers (in-country); the requirement of licenses or
other authorizations for exports, reexports, and transfers (in-country)
of controlled items; apprising the public of changes in policy,
regulations, and procedures; and any other action necessary to carry
out ECRA that is not otherwise prohibited by law. Pursuant to Section
1762(a) of ECRA (50 U.S.C. 4821(a)), these changes can be imposed in a
final rule without prior notice and comment.
VII. Rulemaking Requirements
1. Executive Orders 12866, 13563, and 14094 direct agencies to
assess all costs and benefits of available regulatory alternatives and,
if regulation is necessary, to select regulatory approaches that
maximize net benefits (including potential economic, environmental,
public health and safety effects and distributive impacts and equity).
Executive Order 13563 emphasizes the importance of quantifying both
costs and benefits and of reducing costs, harmonizing rules, and
promoting flexibility. Pursuant to Executive Order 12866, as amended,
this final rule has not been determined to be a ``significant
regulatory action.''
2. Notwithstanding any other provision of law, no person is
required to respond to, nor shall any person be subject to a penalty
for failure to comply with, a collection of information subject to the
requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et
seq.) (PRA), unless that collection of information displays a currently
valid Office of Management and Budget (OMB) Control Number.
This rule involves the following OMB-approved collections of
information subject to the PRA:
<bullet> 0694-0088, ``Multi-Purpose Application,'' which carries a
burden hour estimate of 29.4 minutes for a manual or electronic
submission;
<bullet> 0694-0096 ``Five Year Records Retention Period,'' which
carries a burden hour estimate of less than 1 minute;
<bullet> 0694-0122, ``Licensing Responsibilities and Enforcement;''
which carries a burden hour estimate of 10 minutes per electronic
submission;
<bullet> 0694-0137, ``License Exceptions and Exclusions;'' which
carries a burden hour estimate of 5 minutes per electronic submission;
and
[[Page 96809]]
<bullet> 0607-0152 ``Automated Export System (AES) Program,'' which
carries a burden hour estimate of 3 minutes per electronic submission.
This IFR will affect the collection under control number 0694-0088,
for the multipurpose application because of the addition of HBM
controls to ECCN 3A090.c, the eight new Red Flags added to supplement
no. 3 to part 732, and the addition of the new FDP rules under Sec.
734.9(e)(3) and (k), which will result in additional license
applications. BIS estimates that the changes included in this IFR will
result in an increase of 75 multi-purpose applications (i.e., an
increase of 75 license applications) submitted annually to BIS.
However, the additional burden falls within the existing burden
estimates currently associated with these control numbers.
This regulation also involves a collection previously approved by
the OMB under control number 0694-0122, ``Licensing Responsibilities
and Enforcement'' because this rule under the revision to Sec.
758.6(a)(2) will require the items level classification for ECCN(s)
3A090.c to be included on the commercial invoice, similar to the
previous requirement to include this classification information on the
commercial invoice, which will now require identifying new 3A090.c when
applicable on the commercial invoice. BIS does not anticipate a change
in the total burden hours associated with the PRA and OMB control
number 0694-0122 as a result of this rule.
This IFR also involves a collection previously approved by the OMB
under control number 0694-0137, ``License Exceptions and Exclusions''
because this rule includes the addition of two new EAR license
exceptions, which each include new notification or reporting
requirements that are being added to this BIS information collection
under OMB Control Number 0694-0137. Specifically, this IFR adds new
reporting requirements with the addition of License Exception HBM under
Sec. 740.25 of the EAR and adds new notification and reporting
requirements for the addition of License Exception RFF under Sec.
740.26 of the EAR. These changes are expected to result in an increase
of 10 notifications to BIS under License Exception HBM. BIS estimates
that the time needed to submit each notification to BIS is 20 minutes,
resulting in an increase in burden hours of 3 hours. This collection of
information fits within the scope of this IC. These changes are
expected to result in an increase of 306 prior notifications under
Sec. 740.26(d)(1) to BIS under License Exception RFF. BIS estimates
that the time needed to submit each notification to BIS is 5 minutes,
resulting in an increase in burden hours of 26 hours. This collection
of information fits within the scope of this IC.
These changes are expected to result in an increase of not more
than 3 notifications within one business day under Sec. 740.26(d)(2)
to BIS under License Exception RFF. BIS estimates that the time needed
to submit each notification to BIS is 5 minutes, resulting in an
increase in burden hours of no more than 15 minutes. This collection of
information fits within the scope of this IC. These changes are
expected to result in an increase of 306 installation reports under
Sec. 740.26(e)(1) to BIS under License Exception RFF. BIS estimates
that the time needed to submit each notification to BIS is 5 minutes,
resulting in an increase in burden hours of 26 hours. These changes are
expected to result in an increase of 306 annual end-use confirmation
reports under Sec. 740.26(e)(2) to BIS under License Exception RFF.
BIS estimates that the time needed to submit each notification to BIS
is 5 minutes, resulting in an increase in burden hours of 26 hours.
This collection of information fits within the scope of this IC.
Additional information regarding these collections of information--
including all background materials--can be found at <a href="https://www.reginfo.gov/public/do/PRAMain">https://www.reginfo.gov/public/do/PRAMain</a> by using the search function to enter
either the title of the collection or the OMB Control Number.
3. This rule does not contain policies with federalism implications
as that term is defined in Executive Order 13132.
4. Pursuant to Section 1762 of ECRA (50 U.S.C. 4821), this action
is exempt from the Administrative Procedure Act (APA) (5 U.S.C. 553)
requirements for notice of proposed rulemaking, opportunity for public
participation, and delay in effective date. While Section 1762 of ECRA
provides sufficient authority for such an exemption, this action is
also independently exempt from these APA requirements because it
involves a military or foreign affairs function of the United States (5
U.S.C. 553(a)(1)). However, BIS is accepting comments on this IFR.
5. Because a notice of proposed rulemaking and an opportunity for
public comment are not required to be given for this rule under the APA
(5 U.S.C. 553) or by any other law, the analytical requirements of the
Regulatory Flexibility Act (5 U.S.C. 601, et seq.) are not applicable.
Accordingly, no regulatory flexibility analysis is required, and none
has been prepared.
List of Subjects
15 CFR Parts 732
Administrative practice and procedure, Exports, Reporting and
recordkeeping requirements.
15 CFR Part 734
Administrative practice and procedure, Exports, Inventions and
patents, Research, Science and technology.
15 CFR Parts 740 and 758
Administrative practice and procedure, Exports, Reporting and
recordkeeping requirements.
15 CFR Part 742
Exports, Terrorism.
15 CFR Part 744
Exports, Reporting and recordkeeping requirements, Terrorism.
15 CFR Parts 736, 770, and 772
Exports.
15 CFR Part 762
Administrative practice and procedure, Business and industry,
Confidential business information, Exports, Reporting and recordkeeping
requirements.
15 CFR Part 774
Exports, Reporting and recordkeeping requirements.
For the reasons stated in the preamble, parts 732, 734, 736, 740,
742, 744, 758, 762, 770, 772, and 774 of the Export Administration
Regulations (15 CFR parts 730 through 774) are amended as follows:
PART 732--STEPS FOR USING THE EAR
0
1. The authority citation for part 732 continues to read as follows:
Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50
U.S.C. 1701 et seq.; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p.
228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783.
0
2. In supplement no. 3 to part 732 amend paragraph (b) by adding
paragraphs 20 through 27 to read as follows:
Supplement No. 3 to Part 732--BIS's ``Know Your Customer'' Guidance and
Red Flags
* * * * *
(b) * * *
20. A non-advanced fabrication facility orders equipment
designed for ``advanced-
[[Page 96810]]
node IC'' production, (e.g., Sec. 742.4(a)(4) ECCNs) that it would
not need given its technology level. This technology mismatch
indicates the fabrication facility produces or intends to produce
``advanced-node ICs,'' and it requires resolution before the
exporter, reexporter, or transferor proceeds with the transaction.
21. An exporter, reexporter, or transferor receives an order for
which the ultimate owner or user of the items is uncertain, such as
a request to ship equipment for developing or producing integrated
circuits to a distributor without a manufacturing operation, when
the item is ordinarily customized for the end user or installed by
the supplier. Because the distributor would never be the end user of
such equipment, the ultimate owner or beneficiary is unknown to the
exporter, reexporter, or transferor. This uncertainty raises a Red
Flag that needs to be resolved before the exporter, reexporter, or
transferor proceeds with the transaction, in particular for items
where such information would typically be known to an exporter,
reexporter, or transferor, such as for advanced computing items,
supercomputers, or SME.
22. An exporter, reexporter, or transferor receives an order or
request related to an item that would require an export, reexport,
or in-country transfer license from BIS or another jurisdiction that
maintains controls on the item, and there is uncertainty about the
license history for the item. For example, there is information
known to the exporter, reexporter, or transferor indicating that a
required license was not, or would not have likely been obtained by
the end user, such as where the end user or end use, or the ECCN and
end-user destination triggers a license review policy of a
presumption of denial. These uncertainties raise a Red Flag that
needs to be resolved before the exporter, reexporter, or transferor
proceeds with further transactions related to the item to avoid the
risk of violating Sec. 764.2(e) (``Acting with knowledge of a
violation.''). This would include acting on requests to service,
install, upgrade, or otherwise maintain the item of concern.
23. An exporter, reexporter, or transferor receives a request to
service, install, upgrade, or otherwise maintain an item that was
altered after export, reexport, or transfer by a third-party for a
more advanced end use that would normally require a license for the
destination. This scenario raises a Red Flag that the item is
employed in a prohibited end use that would need to be resolved
before proceeding further with the transaction.
24. An exporter, reexporter, or transferor receives a request
for an item or service from a new customer. The new customer's
senior management or technical leadership (e.g., process engineers
that are team leaders or otherwise leading development or production
activities) overlaps with an entity on the Entity List in supplement
no. 4 to part 744 of the EAR, particularly if the supplier
previously provided the same or substantially similar item or
service to the Entity List entity, most likely prior to the listed
entity being added to the Entity List. This scenario would raise a
Red Flag that the entity requesting the item or service is engaged
in or supporting the same prohibited end use as the Entity List
entity, and the supplier would need to conduct additional due
diligence before proceeding with the transaction with the new
customer.
25. An exporter, reexporter, or transferor receives a request
from a new customer for an item or service that was designed or
modified for an existing or former customer that is now designated
on the Entity List. This scenario would raise a Red Flag that the
new customer has assumed the operations for which the item or
service is still needed to engage in or support the same prohibited
end-use for which the Entity List entity was listed. The exporter,
reexporter, or transferor must resolve this Red Flag before
proceeding with the transaction.
26. For purposes of analyzing the scope of the Entity List FDP
rule for Footnote 5 entities described in Sec. 734.9(e)(3) and the
SME FDP rule in Sec. 734.9(k), if a foreign-produced item is
described in the relevant Category 3B ECCN in Sec. 734.9(e)(3)(i)
or Sec. 734.9(k)(1) and contains at least one integrated circuit,
then there is a Red Flag that the foreign-produced item meets the
product scope of the applicable FDP rule. The exporter, reexporter,
or transferor must resolve this Red Flag before proceeding.
27. The end user is a ``facility'' that is physically connected
to a ``facility'' where ``production'' of ``advanced-node ICs''
occurs. This scenario raises a Red Flag that the end user is also a
``facility'' where the ``production'' of ``advanced-node ICs''
occurs, and the supplier would need to conduct additional due
diligence before proceeding with the transaction. For example, if an
exporter, reexporter, or transferor receives an equipment order from
a company that is engaged in ``production'' of non-``advanced-node
ICs'' in a building with a bridge, tunnel, or other connection to
another building where the ``production'' of ``advanced-node ICs''
occurs, then both buildings would be subject to the controls under
Sec. 744.23 of the EAR. However, if the exporter or fabrication
facility has received an Advisory Opinion from BIS confirming that
the ``production'' technology node for the relevant facility does
not qualify as an ``advanced-node IC'' technology node, that would
resolve the Red Flag of the connection to the advanced facility.
Unless the Red Flag is resolved through an Advisory Opinion, the two
buildings are treated as a single ``facility'' for purposes of Sec.
744.23 of the EAR.
PART 734--SCOPE OF THE EXPORT ADMINISTRATION REGULATIONS
0
3. The authority citation for part 734 is revised to read as follows:
Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50
U.S.C. 1701 et seq.; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p.
950; E.O. 13020, 61 FR 54079, 3 CFR, 1996 Comp., p. 219; E.O. 13026,
61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3
CFR, 2001 Comp., p. 783; E.O. 13637, 78 FR 16129, 3 CFR, 2014 Comp.,
p. 223; Notice of November 7, 2024, 89 FR 88867 (November 8, 2024).
0
4. Section 734.4 is amended by:
0
a. Revising paragraph (a)(3); and
0
b. Adding paragraphs (a)(8) and (9).
The revision and additions read as follows:
Sec. 734.4 De minimis U.S. content.
(a) * * *
(3) There is no de minimis level for equipment meeting the
parameters in ECCN 3B993.f.1 of the Commerce Control List in supplement
no. 1 to part 774 of the EAR, when the equipment is destined for use in
the ``development'' or ``production'' of ``advanced-node integrated
circuits'' and the ``advanced-node integrated circuits'' meet the
parameter specified in paragraph (1) of that definition in Sec. 772.1
of the EAR, unless the country from which the foreign-made item was
first exported \1\ has a commodity specified on an export control list.
* * * * *
(8) There is no de minimis level related to the SME FDP rule for a
commodity meeting the parameters in ECCNs 3B001.a.4, c, d, f.1, f.5, k
to n, p.2, p.4, r, or 3B002.c of the Commerce Control List (CCL) in
supplement no. 1 to part 774 of the EAR, when the commodity contains a
U.S.-origin integrated circuit specified under Category 3, 4, or 5 of
the CCL, and the commodity is destined for Macau or a destination
specified in Country Group D:5, unless excluded from the national
security license requirement in Sec. 742.4(a)(4) or the regional
stability license requirement in Sec. 742.6(a)(6) of the EAR.
(9) There is no de minimis level related to the Footnote 5 FDP rule
for an item meeting the parameters in ECCNs specified in Category 3B
(except 3B001.a.4, c, d, f.1, f.5, k to n, p.2, p.4, r, or 3B002.c) of
the Commerce Control List (CCL) in supplement no. 1 to part 774 of the
EAR, when the commodity contains a U.S.-origin integrated circuit
specified under Category 3, 4, or 5 of the CCL, and the commodity is
destined for an entity with a Footnote 5 designation in the license
requirement column of the Entity List in supplement no. 4 to part 744
of the EAR.
* * * * *
\1\ The Government of Japan added ArF-wet lithography equipment
and other advanced semiconductor manufacturing equipment to its
control list for all regions on July 23, 2023.
* * * * *
0
5. Section 734.9 is amended by:
0
a. Revising the introductory text;
0
b. Revising paragraphs (e) introductory text, (e)(1)(i)(A) and (B), and
(e)(2)(i)(A) and (B);
0
c. Adding paragraph (e)(3);
[[Page 96811]]
0
d. Revising paragraphs (h)(1)(i)(A) introductory text, (h)(1)(ii)(A),
and (i)(1)(i) and (ii); and
0
e. Adding paragraph (k).
The revisions and additions read as follows:
Sec. 734.9 Foreign-Direct Product (FDP) Rules.
Foreign-produced items located outside the United States are
subject to the EAR when they are a ``direct product'' of specified
``technology'' or ``software,'' produced by a complete plant or `major
component' of a plant that itself is a ``direct product'' of specified
``technology'' or ``software,'' or, for specified foreign-produced
items in paragraph (e)(3)(i)(B)(2) of this section, contain an item
produced by a complete plant or `major component' of a plant that
itself is a ``direct product'' of specified ``technology'' or
``software.'' If a foreign-produced item is subject to the EAR, then
you should separately determine the license requirements that apply to
that foreign-produced item (e.g., by assessing the item classification,
destination, end-use, and end-user in the relevant transaction). Not
all transactions involving foreign-produced items that are subject to
the EAR require a license. Those transactions that do require a license
may be eligible for a license exception.
* * * * *
(e) Entity List FDP rules. A foreign-produced item is subject to
the EAR if it meets the product scope and end-user scope in either
Entity List FDP rule footnote 1 provision in paragraph (e)(1) of this
section; the Entity List FDP rule footnote 4 provision in paragraph
(e)(2) of this section; or the Entity List FDP rule Footnote 5
provision in paragraph (e)(3) of this section.
(1) * * *
(i) * * *
(A) ``Direct product'' of ``technology'' or ``software.'' A
foreign-produced item meets the product scope of this paragraph
(e)(1)(i)(A) if the foreign-produced item is a ``direct product'' of
``technology'' or ``software'' subject to the EAR and specified in ECCN
3D001, 3D901, 3D991, 3D992, 3D993, 3D994, 3E001, 3E002, 3E003, 3E901,
3E991, 3E992, 3E993, 3E994, 4D001, 4D993, 4D994, 4E001, 4E992, 4E993,
5D001, 5D991, 5E001, or 5E991 of the Commerce Control List (CCL) in
supplement no. 1 to part 774 of the EAR; or
(B) Product of a complete plant or 'major component' of a plant
that is a ``direct product.'' A foreign-produced item meets the product
scope of this paragraph if the foreign-produced item is produced by any
complete plant or `major component' of a plant that is located outside
the United States, when the complete plant or `major component' of a
plant, whether made in the U.S. or a foreign country, itself is a
``direct product'' of U.S.-origin ``technology'' or ``software'' that
is specified in ECCN 3D001, 3D901, 3D991, 3D992, 3D993, 3D994, 3E001,
3E002, 3E003, 3E901, 3E991, 3E992, 3E993, 3E994, 4D001, 4D993, 4D994,
4E001, 4E992, 4E993, 5D001, 5D991, 5E001, or 5E991 of the CCL.
Note 2 to paragraph (e)(1)(i): A foreign-produced item includes
any foreign-produced wafer whether finished or unfinished.
* * * * *
(2) * * *
(i) * * *
(A) ``Direct product'' of ``technology'' or ``software.'' The
foreign-produced item is a ``direct product'' of ``technology'' or
``software'' subject to the EAR and specified in ECCN 3D001, 3D901
3D991, 3D992, 3D993, 3D994, 3E001, 3E002, 3E003, 3E901, 3E991, 3E992,
3E993, 3E994, 4D001, 4D993, 4D994, 4E001, 4E992, 4E993, 5D001, 5D002,
5D991, 5E001, 5E002, or 5E991 of the CCL; or
(B) Product of a complete plant or 'major component' of a plant
that is a ``direct product.'' A foreign-produced item meets the product
scope of this paragraph if the foreign-produced item is produced by any
complete plant or `major component' of a plant that is located outside
the United States, when the complete plant or `major component' of a
plant, whether made in the U.S. or a foreign country, itself is a
``direct product'' of U.S.-origin ``technology'' or ``software'' that
is specified in ECCN 3D001, 3D901, 3D991, 3D992, 3D993, 3D994, 3E001,
3E002, 3E003, 3E901, 3E991, 3E992, 3E993, 3E994, 4D001, 4D993, 4D994,
4E001, 4E992, 4E993, 5D001, 5D002, 5D991, 5E001, 5E002, or 5E991 of the
CCL.
* * * * *
(3) Entity List FDP rule: Footnote 5. A foreign-produced commodity
is subject to the EAR if it meets both the product scope in paragraph
(e)(3)(i) of this section and the end-user scope in paragraph
(e)(3)(ii) of this section. See Sec. 744.11(a)(2)(v) of the EAR for
license requirements, exclusion from license requirements, and license
review policy, applicable to foreign-produced commodities that are
subject to the EAR pursuant to this paragraph (e)(3).
(i) Product Scope Entity List FDP rule: Footnote 5. The product
scope applies if a foreign-produced commodity is specified in ECCN
3B001 (except 3B001.a.4, c, d, f.1, f.5, g, h, k to n, p.2, p.4, r),
3B002 (except 3B002.c), 3B903, 3B991 (except 3B991.b.2.a through
3B991.b.2.b), 3B992, 3B993, or 3B994, and meets the conditions of
either paragraph (e)(3)(i)(A) or (B) of this section.
(A) ``Direct product'' of ``technology'' or ``software.'' A
foreign-produced item meets the product scope of this paragraph if the
foreign-produced commodity is a ``direct product'' of ``technology'' or
``software'' subject to the EAR and specified in ECCN 3D001 (for 3B
commodities), 3D901(for 3B903), 3D991 (for 3B991 and 3B992), 3D993,
3D994, 3E001 (for 3B commodities), 3E901 (for 3B903), 3E991 (for 3B991
and 3B992), 3E993, or 3E994 of the Commerce Control List (CCL) in
supplement no. 1 to part 774 of the EAR; or
(B) Product of a complete plant or `major component' of a plant
that is a ``direct product,'' or a commodity that contains a product of
a complete plant or `major component' of a plant that is a ``direct
product.'' A foreign-produced commodity meets the product scope of this
paragraph if the foreign-produced commodity meets at least one of the
following conditions:
(1) Is produced by any complete plant or `major component' of a
plant that is located outside the United States, when the complete
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 ECCN 3D001
(for 3B commodities), 3D901, 3D991 (for 3B991 and 3B992), 3D992, 3D993,
3D994, 3E001 (for 3B commodities), 3E901 (for 3B903), 3E991 (for 3B991
and 3B992), 3E992, 3E993, or 3E994 of the CCL; or
(2) Contains a commodity produced by any complete plant or `major
component' of a plant that is located outside the United States, when
the complete 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 ECCN
3D001 (for 3B commodities), 3D901, 3D991 (for 3B991 and 3B992), 3D992,
3D993, 3D994, 3E001 (for 3B commodities), 3E901 (for 3B903), 3E991 (for
3B991 and 3B992)), 3E992, 3E993, or 3E994 of the CCL.
Note 3 to paragraph (e)(3)(i)(B)(2):
The product scope of paragraph (e)(3)(i) is met if a foreign-
produced commodity contains an integrated circuit that is produced
by a complete plant or `major component' of a plant that itself is a
``direct product'' of U.S.-origin ``technology'' or ``software''
specified in the ECCNs described in paragraph
[[Page 96812]]
(e)(3)(i)(B)(2). See Red Flag 26 in supplement no. 3 to part 732 for
additional guidance on the scope of paragraph (e)(3)(i). Production
of an integrated circuit includes fabrication of the integrated
circuit in a wafer, as well as assembly, testing, and packaging of
the integrated circuit.
(ii) End-user scope of the Entity List FDP rule: Footnote 5. A
foreign-produced commodity meets the end-user scope of this paragraph
(e)(3)(ii) if there is ``knowledge'' that:
(A) Activities involving Footnote 5 designated entities. The
foreign-produced commodity will be incorporated into any ``part,''
``component,'' or ``equipment'' produced, purchased, or ordered by any
entity with a Footnote 5 designation in the license requirement column
of the Entity List in supplement no. 4 to part 744 of the EAR; or
(B) Footnote 5 designated entities as transaction parties. Any
entity with a Footnote 5 designation in the license requirement column
of the Entity List in supplement no. 4 to part 744 of the EAR is a
party to any transaction involving the foreign-produced commodity
(e.g., as a ``purchaser,'' ``intermediate consignee,'' ``ultimate
consignee,'' or ``end-user'').
* * * * *
(h) * * *
(1) * * *
(i) * * *
(A) The foreign-produced item is the ``direct product'' of
``technology'' or ``software'' subject to the EAR and specified in ECCN
3D001, 3D901, 3D991, 3D992, 3D993, 3D994, 3E001, 3E002, 3E003, 3E901,
3E991, 3E992, 3E993, 3E994, 4D001, 4D090, 4D993, 4D994, 4E001, 4E992,
4E993, 5D001, 5D002, 5D991, 5E001, 5E991, or 5E002 of the CCL; and
* * * * *
(ii) * * *
(A) The foreign-produced item is produced by any complete 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 ECCN
3D001, 3D901, 3D991, 3D992, 3D993, 3D994, 3E001, 3E002, 3E003, 3E901,
3E991, 3E992, 3E993, 3E994, 4D001, 4D090, 4D993, 4D994, 4E001, 4E992,
4E993, 5D001, 5D991, 5E001, 5E991, 5D002, or 5E002 of the CCL; and
* * * * *
(i) * * *
(1) * * *
(i) ``Direct product'' of ``technology'' or ``software.'' The
foreign-produced item meets the product scope of this paragraph
(i)(1)(i) if the foreign-produced item is a ``direct product'' of
``technology'' or ``software'' subject to the EAR and specified in ECCN
3D001, 3D901, 3D991, 3D992, 3D993, 3D994, 3E001, 3E002, 3E003, 3E901,
3E991, 3E992, 3E993, 3E994, 4D001, 4D993, 4D994, 4E001, 4E992, 4E993,
5D001, 5D002, 5D991, 5E001, 5E002, or 5E991 of the CCL; or
(ii) Product of a complete plant or 'major component' of a plant
that is a ``direct product.'' A foreign-produced item meets the product
scope of this paragraph if the foreign-produced item is produced by any
complete plant or `major component' of a plant that is located outside
the United States, when the complete 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 ECCN 3D001, 3D901, 3D991, 3D992, 3D993, 3D994,
3E001, 3E002, 3E003, 3E901, 3E991, 3E992, 3E993, 3E994, 4D001, 4D994,
4E001, 4E992, 4E993, 5D001, 5D002, 5D991, 5E001, 5E002, or 5E991 of the
CCL.
* * * * *
(k) Semiconductor Manufacturing Equipment (SME) FDP rule. A
foreign-produced commodity is subject to the EAR if it meets both the
product scope in paragraph (k)(1) of this section and the destination
scope in paragraph (k)(2) of this section. See Sec. Sec. 742.4(a)(4)
and 742.6(a)(6)(i)(A) of the EAR for license requirements and
exclusions to the license requirements and Sec. Sec. 742.4(b)(2) and
742.6(b)(10) for license review policy applicable to foreign-produced
commodities that are subject to the EAR under this paragraph (k).
(1) Product scope. The product scope applies to a foreign-produced
commodity specified in ECCN 3B001.a.4, c, d, f.1, f.5, k to n, p.2,
p.4, r, or 3B002.c that meets the conditions of either paragraph
(k)(1)(i) or (ii) of this section.
(i) ``Direct product'' of ``technology'' or ``software.'' A
foreign-produced commodity meets the product scope of this paragraph
(k) if the foreign-produced commodity is the ``direct product'' of
``technology'' or ``software'' subject to the EAR and specified in
3D992 or 3E992 of the CCL; or
(ii) Product of a complete plant or `major component' of a plant
that is a ``direct product.'' A foreign-produced commodity meets the
product scope of this paragraph if it meets either of the following
conditions:
(A) Is produced by any complete 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 ECCN 3D001 (for 3B
commodities), 3D901, 3D991 (for 3B991 and 3B992), 3D992, 3D993, 3D994,
3E001 (for 3B commodities), 3E901 (for 3B903), 3E991 (for 3B991 or
3B992), 3E992, 3E993, or 3E994 of the CCL; or
(B) Contains a commodity produced by any complete plant or `major
component' of a plant that is located outside the United States, when
the complete plant or `major component' of a plant, whether made in the
U.S. or a foreign country, itself is a ``direct product'' of U.S.-
origin ``technology'' or ``software'' that is specified in ECCN 3D001
(for 3B commodities), 3D901, 3D991 (for 3B991 and 3B992), 3D992, 3D993,
3D994, 3E001 (for 3B commodities), 3E901 (for 3B903), 3E991 (for 3B991
or 3B992), 3E992, 3E993, or 3E994 of the CCL.
Note 3 to paragraph (k)(1)(ii)(B): The product scope of
paragraph (k)(1) is met if a foreign-produced commodity contains an
integrated circuit that is produced by a complete plant or `major
component' of a plant that itself is a ``direct product'' of U.S.-
origin ``technology'' or ``software'' specified in the ECCNs
described in paragraph (k)(1)(ii)(B). See Red Flag 26 in supplement
no. 3 to part 732 for additional guidance on the scope of paragraph
(k)(1). Production of an integrated circuit includes fabrication of
the integrated circuit in a wafer, as well as assembly, testing, and
packaging of the integrated circuit.
(2) Destination scope of the SME FDP rule. A foreign-produced item
meets the destination scope of this paragraph (k)(2) if there is
``knowledge'' that the foreign-produced item is destined to Macau or a
destination in Country Group D:5 of supplement no. 1 to part 740 of the
EAR.
* * * * *
0
6. Section 734.19 is revised to read as follows:
Sec. 734.19 Transfer of access information and export, reexport, and
transfer (in-country) of software keys.
(a) To the extent an authorization would be required to transfer
``technology'' or ``software,'' a comparable authorization is required
to transfer ``access information'' if done with ``knowledge'' that such
transfer would result in the release of such ``technology'' or
``software'' without a required authorization.
Note 1 to paragraph (a): For purposes of this section, a release
of ``software'' includes source code and object code.
[[Page 96813]]
(b) Software keys, also called software license keys, that allow
users the ability to use the ``software'' or hardware, or software keys
that renew existing ``software'' or hardware use licenses, are
classified and controlled under the same ECCNs on the CCL as the
corresponding ``software'' or hardware to which they provide access. If
authorization is required for the export, reexport, or transfer (in-
country) of the ``software'' or hardware, the same level of
authorization is required for the software key. If authorization is
obtained for the export, reexport, or transfer (in-country) of the
``software'' or hardware, that authorization also applies to the
corresponding software license key. If no authorization was required
for the initial export of the ``software'' or hardware and the
associated software key, but a license requirement is later imposed on
the ``software'' or hardware, (e.g., a license requirement is imposed
because the end user becomes listed on the Entity List in supplement
no. 4 to part 744), then subsequent exports, reexports, or transfers
(in-country) of both the ``software'' and hardware, and the associated
software license key will be subject to the new license requirement.
Note 2 to paragraph (b): This paragraph does not apply to keys
that unlock dormant functionality in an item. However, in some
cases, changes to, or the addition of, features may impact the
classification of the item.
PART 736--GENERAL PROHIBITIONS
0
7. The authority citation for part 736 is revised to read as follows:
Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50
U.S.C. 1701 et seq.; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p.
950; E.O. 13020, 61 FR 54079, 3 CFR, 1996 Comp., p. 219; E.O. 13026,
61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3
CFR, 2001 Comp., p. 783; E.O. 13338, 69 FR 26751, 3 CFR, 2004 Comp.,
p. 168; Notice of May 8, 2024, 89 FR 40355 (May 9, 2024); Notice of
November 7, 2024, 89 FR 88867 (November 8, 2024).
0
8. Section 736.2 is amended by revising paragraph (b)(3)(i) to read as
follows:
Sec. 736.2 General prohibitions and determination of applicability.
* * * * *
(b) * * *
(3) General Prohibition Three--Foreign-direct product (FDP) rules.
(i) You may not, without a license or license exception, export from
abroad, reexport, or transfer (in-country) foreign-``direct products''
or other foreign-produced items subject to the EAR pursuant to Sec.
734.9 if such items are subject to a license requirement in part 736,
742, 744, 746, or 764 of the EAR.
* * * * *
0
9. Supplement no. 1 to part 736 is amended by revising paragraphs
(d)(1), (2), and (3), to read as follows:
Supplement No. 1 to Part 736--General Orders
* * * * *
(d) * * *
(1) TGL--Less restricted SME ``parts,'' ``components,'' or
``equipment.'' This TGL only overcomes the license requirements
described in Sec. 744.23(a)(4) of EAR when:
(i) Product scope. The items subject to the EAR that are
specified on the Commerce Control List (CCL) in supplement no. 1 to
part 774 of the EAR, as follows:
(A) ECCNs that are designated as controlled on the CCL only for
AT reasons (3A991, 3B992, and associated ``software'' and
``technology''); or
(B) ECCN 3B001.c.4, 3B993.b.1, c.2, c.3, d.4, f.2, f.3, o.2,
q.1, q.2, 3B994, 3D993.a (for commodities specified in this
paragraph), 3D993.b through d, 3D994, 3E993.a (for commodities
specified in this paragraph), 3E993.b, or 3E994; and
(ii) End-use scope. The recipient is ``developing'' or
``producing'' ``parts,'' ``components,'' or ``equipment'' (as
specified in Sec. Sec. 744.23(a)(4) and 742.6(a)(11)) of the EAR)
at the direction of a company that is headquartered in the United
States or a destination specified in Country Group A:5 or A:6 and
not majority-owned by an entity headquartered in either Macau or a
destination specified in Country Group D:5.
(2) TGL--Advanced computing items. This TGL only overcomes the
license requirements described in Sec. 742.6(a)(6)(iii) of the EAR
when the criteria in paragraphs (d)(2)(i) and either (d)(2)(ii)(A)
or (d)(2)(ii)(B) are met.
(i) Product scope. The items subject to the EAR are specified
in, either:
(A) ECCNs 3A001.z; 3A090.a and 3A090.b; 3D001 (for ``software''
for commodities controlled by 3A001.z, 3A090.a and 3A090.b); 3E001
(for ``technology'' for commodities controlled by 3A001.z, 3A090.a
and .b); 4A003.z; 4A004.z; 4A005.z; 4A090; 4D001 (for ``software''
for commodities controlled by 4A003.z, 4A004.z, and 4A005.z); 4D090;
4E001 (for ``technology'' for commodities controlled by 4A003.z,
4A004.z, 4A005.z, 4A090 or ``software'' specified by 4D001 (for
4A003.z, 4A004.z, and 4A005.z); 4D090; 5A002.z; 5A004.z; 5A992.z;
5D002.z; 5D992.z; 5E002 (for ``technology'' for commodities
controlled by 5A002.z or 5A004.z or ``software'' specified by 5D002
(for 5A002.z or 5A004.z commodities)); or 5E992 (for ``technology''
for commodities controlled by 5A992.z or ``software'' controlled by
5D992.z) of the Commerce Control List (CCL); or
(B) ECCN 3A090.c.
(ii) End-use scope--(A) For all items under paragraph (d)(2)(i).
Any item identified under the paragraph (d)(2)(i) of this
supplement, may be exported, reexported, or transferred (in-country)
to or within a destination specified in Country Groups D:1, D:4, or
D:5 (and not specified in Country Groups A:5 or A:6) or for 3A090.c
to or within Macau or a destination specified in Country Group D:5
when either of the following apply:
(1) The end user is located in, but is not headquartered in, or
whose ultimate parent company is not headquartered in, Macau or
Country Group D:5 and the end use is to continue or engage in the
following activities: integration, assembly (mounting), inspection,
testing, quality assurance, and distribution of items covered by
items specified in paragraph (d)(2)(i); and
(2) The ultimate end user of these items is located outside of
destinations specified in Country Groups D:1, D:4, or D:5 (and not
specified in Country Groups A:5 or A:6) by entities not
headquartered in or whose ultimate parent company is not
headquartered in Macau or a destination specified in Country Group
D:5.
(B) Additional permitted ultimate end use for 3A090.c. ECCN
3A090.c commodities are authorized under this paragraph (d)(2)(ii)
of this General Order No. 4 for use in any destination if the
3A090.c commodity is incorporated into another commodity, provided
that the higher-level commodity is not identified in paragraph
(d)(2)(i) of this General Order No. 4. If the higher-level commodity
is identified under paragraph (d)(2)(i), of this General Order No.
4, then the ultimate end use of these items is authorized under this
paragraph (d)(2)(ii) for destinations other than those specified in
Country Groups D:1, D:4, or D:5 (and not specified in Country Groups
A:5 or A:6) by entities not headquartered in, or whose ultimate
parent company is not headquartered in, Macau or a destination
specified in Country Group D:5. Any subsequent export, reexport, or
transfer (in-country) of a 3A090.c commodity (regardless of whether
it was incorporated into a higher-level commodity) would also need
to comply with any other applicable EAR license requirements such as
those based on the classification (including, if relevant, the
higher-level commodity) and the end use and parties to the
transaction.
(3) Validity date follows:
(i) Paragraph (d)(1)(i)(A) expires on December 31, 2026;
(ii) Paragraph (d)(1)(i)(B) expires on December 31, 2026;
(iii) Paragraph (d)(2)(i)(A) expires on December 31, 2025; and
(iv) Paragraph (d)(2)(i)(B) expires on December 31, 2026.
* * * * *
PART 740--LICENSE EXCEPTIONS
0
10. The authority citation for part 740 continues to read as follows:
Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50
U.S.C. 1701 et seq.; 22 U.S.C. 7201 et seq.; E.O. 13026, 61 FR
58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR,
2001 Comp., p. 783.
0
11. Section 740.2 is amended by:
0
a. Revising paragraph (a)(9)(i) and paragraph (a)(9)(ii) introductory
text;
[[Page 96814]]
0
b. Adding a new note to paragraph (a)(9)(ii).
The revisions and addition read as follows:
Sec. 740.2 Restrictions on all License Exceptions.
* * * * *
(a) * * *
(9) * * *
(i) The item is controlled under ECCN 3B001.a.4, c, d, f.1, f.5, k
to n, p.2, p.4, r, 3B002.c, 3B993, 3B994, or associated software and
technology in ECCN 3D001, 3D002, 3D003, 3D992, 3D993, 3D994, 3E001,
3E992, 3E993, or 3E994 and is being exported, exported from abroad,
reexported, or transferred (in-country) to or within either Macau or a
destination specified in Country Group D:5 of supplement no. 1 to this
part, and the license exception is other than License Exception GOV,
restricted to eligibility under the provisions of Sec. 740.11(b).
(ii) The item is identified in paragraph (a)(9)(ii)(A) or (B) of
this section, is being exported, reexported, or transferred (in-
country) to or within a destination specified in Country Group D:1,
D:4, or D:5, excluding any destination also specified in Country Groups
A:5 or A:6, or to an entity headquartered in or whose ultimate parent
headquartered in, Macau or a destination specified in Country Group
D:5, wherever located, and the license exception is other than: TMP,
restricted to eligibility under the provisions of Sec. 740.9(a)(6);
NAC/ACA, under the provisions of Sec. 740.8; RPL, under the provisions
of Sec. 740.10; GOV, restricted to eligibility under the provisions of
Sec. 740.11(b); TSU under the provisions of Sec. 740.13(a) and (c);
or HBM under the provisions of Sec. 740.25. Items restricted to
eligibility only for the foregoing license exceptions are:
* * * * *
Note 1 to paragraph (a)(9)(ii): ECCN 3A090.c requires a license
for exports, reexports, and transfers (in-country) to or within
Macau or destinations specified in Country Group D:5, but is still
included within the scope of this paragraph because it generally
shares the same EAR license exception eligibility as other 3A090
commodities, except for NAC/ACA, under the provisions of Sec.
740.8., which ECCN 3A090.c is not eligible. An export, reexport, or
transfer (in-country) of an ECCN 3A090.c commodity to a destination
specified in Country Groups D:1 or D:4 that is not specified in
Country Group D:5, may be made under the No License Required (NLR)
designation, provided no part 744 or 746 license requirements are
applicable.
* * * * *
0
12. Section 740.8 is amended by revising paragraph (a) introductory
text to read as follows:
Sec. 740.8 Notified Advanced Computing (NAC) and Advanced Computing
Authorized (ACA).
(a) Eligibility requirements. License Exception NAC authorizes the
export and reexport of any item classified in ECCN 3A090 (except for
3A090.c), 4A090, 3A001.z, 4A003.z, 4A004.z, 4A005.z, 5A002.z, 5A004.z,
5A992.z, 5D002.z, or 5D992.z, except for items designed or marketed for
use in a datacenter and meeting the parameters of 3A090.a, to Macau and
Country Group D:5 or an entity headquartered in, or whose ultimate
parent headquartered in, Macau or a destination specified in Country
Group D:5, wherever located. License Exception ACA authorizes the
export, reexport, and transfer (in-country) of any item classified in
ECCN 3A090 (except for 3A090.c), 4A090, 3A001.z, 4A003.z, 4A004.z,
4A005.z, 5A002.z, 5A004.z, 5A992.z, 5D002.z, or 5D992.z, except for
items designed or marketed for use in a datacenter and meeting the
parameters of 3A090.a, to or within any destination specified in
Country Groups D:1 and D:4 (except Macau, a destination in Country
Group D:5, or an entity headquartered in, or whose ultimate parent
headquartered in, Macau or a destination specified in Country Group
D:5, wherever located), as well as transfers (in-country) within Macau
and destinations in Country Group D:5. These license exceptions may be
used provided the export, reexport, or transfer (in-country) meets all
of the applicable criteria identified under this paragraph (a) and none
of the restrictions in paragraph (b) of this section.
* * * * *
0
13. Sections 740.25 and 740.26 are added to read as follows:
Sec. 740.25 License Exception High Bandwidth Memory (HBM).
(a) Scope. This License Exception High Bandwidth Memory (HBM)
authorizes the export, reexport, or transfer (in-country) of items
specified in ECCN 3A090.c on the Commerce Control List (CCL) in
supplement no. 1 to part 774 if all terms and conditions within this
section are met.
(b) Exporter, reexporter, transferor. The exporter, reexporter, or
transferor must be headquartered in the United States or a destination
specified in Country Group A:5 of supplement no. 1 to this part,
without an ultimate parent headquartered in Macau or a destination
specified in Country Group D:5 of supplement no. 1 to this part.
(c) Conditions. The following exports, reexports, or transfers (in-
country) are only authorized under this License Exception HBM if the
3A090.c item has a memory bandwidth density less than 3.3 GB/s/
mm[supcaret]2 and both of the following conditions apply:
(1) The 3A090.c items exported, reexported, or transferred to or
within Macau or a destination specified in Country Group D:5 must be
directly purchased by the designer of the co-packaged commodity not
otherwise prohibited from receipt of the item; and
(2) The 3A090.c items must be exported, reexported, or transferred
(in-country) directly to the packaging site.
(i) For 3A090.c items exported, reexported, or transferred (in-
country) to a U.S., or Country Group A:5 or A:6-headquartered packaging
site without an ultimate parent headquartered in Macau or a destination
specified in Country Group D:5 of supplement no. 1 to part 740:
(A) The packaging site must confirm in writing to the producer of
the chips that the 3A090.c item was packaged and exported, reexported,
or transferred (in-country) to the specified designer of the co-
packaged commodity. This confirmation is considered an ``export control
document'' and is subject to recordkeeping requirements in part 762. A
copy of this record must be provided to BIS upon request; and
(B) The finished, co-packaged commodities must not exceed the
technical thresholds in ECCN 3A090, unless packaging the item is
permitted under the Temporary General License (TGL) specified in
paragraph (d) of General Order No. 4 in of supplement no. 1 to part
736.
(ii) For 3A090.c items exported, reexported, or transferred (in-
country) to any other packaging site, the finished, co-packaged
commodities must be sent back to the exporter, reexporter, or
transferor for export, reexport, or transfer (in-country) to the
purchaser:
(A) Upon receipt of the finished, co-packaged commodities, the
exporter, reexporter, transferor must confirm the number of 3A090.c
units contained within the finished, co-packaged chips received from
the packaging site matches the number of 3A090.c items exported,
reexported, or transferred (in-country) to the packaging site. This
confirmation is considered an ``export control document'' and is
subject to recordkeeping requirements in part 762. A copy of this
record must be provided to BIS upon request; and
(B) The finished, co-packaged commodities must not exceed the
technical thresholds in ECCN 3A090.a or 3A090.b.
[[Page 96815]]
(d) Restrictions. The following exports, reexports, or transfers
(in-country) of 3A090.c items are not authorized under this License
Exception HBM:
(1) To distributors.
(2) To intermediate consignees, unless hired by the packaging site
for freight forwarding or customs clearance.
(3) To co-packaging at a ``facility'' located in Macau or a
destination specified in Country Group D:5 where ``production'' of
``advanced-node ICs'' occurs.
(e) Reporting requirement. In the event that the exporter,
reexporter, or transferor identifies a discrepancy of greater than 1
percent between the number of 3A090.c units exported, reexported, or
transferred (in-country) to the packaging site and the number of
3A090.c units contained within the finished, co-packaged commodities
received from the packaging site under paragraph (c)(2)(ii) of this
section, this generates a `Red Flag' that must be resolved before
exporting, reexporting, or transferring (in-country) the finished, co-
packaged commodities to the designer of the co-packaged commodity or
engaging in any further exports, reexports, or transfers (in-country)
of 3A090.c items to the designer of the co-packaged commodity or
packaging site involved in the transaction that raised the Red Flag. If
the Red Flag cannot be resolved, then within 60 days of identifying the
discrepancy, the exporter, reexporter, or transferor must report the
information in paragraph (e)(1) to BIS consistent with the requirements
under paragraph (e)(2).
(1) Information required. (i) Date of shipment;
(ii) Quantity exported and quantity returned;
(iii) Name of Consignee or designer of the co-packaged commodity;
(iv) Name and address of the packaging site;
(v) End use; and
(vi) Explanation of measures already taken or planned to resolve
the Red Flag.
(2) Submission requirements. Reports must be provided in electronic
form. Recommended file formats for electronic submission include
spreadsheets, tabular text or structured text. Submitters may request
other reporting arrangements with BIS to better reflect their business
models. Reports are to be sent electronically to BIS at the email
address: <a href="/cdn-cgi/l/email-protection#5018121d0235203f222423103239237e343f337e373f26"><span class="__cf_email__" data-cfemail="f7bfb5baa5928798858384b7959e84d9939894d9909881">[email protected]</span></a> with the email subject line Attn: LE
HBM Discrepancy Reports.
Sec. 740.26 License Exception Restricted Fabrication ``Facility''
(RFF).
(a) Scope. License Exception Restricted Fabrication ``Facility''
(RFF) authorizes the export, reexport, export from abroad, and transfer
(in-country) of items not specified in ECCNs 3B001, 3B002, 3B993,
3B994, 3D992, 3D993, 3D994, 3E992, 3E993, or 3E994. Additionally, this
license exception does not overcome destination-based license
requirements in part 742, end-use based license requirements in other
sections of part 744, or license requirements that apply to other
entities on the Entity List if other listed entities that are not
eligible for this license exception are a party to the transaction.
(b) Definition. A restricted fabrication ``facility'' is an entity
that is on the Entity List in supplement no. 4 to part 744 of the EAR
that has a reference to Sec. 740.26 in the license requirement column.
(c) Restrictions. License Exception RFF is subject to the following
restrictions.
(1) Items may not be used for the operation, installation,
maintenance, repair, overhaul, or refurbishing of items specified in
ECCNs 3B001.a.4, c, d, f.1, f.5, k to n, p.2, p.4, r, 3B002.c, 3B993,
or 3B994 at a `restricted fabrication facility'.
(2) The item may not be used to produce ``advanced-node integrated
circuits.''
(d) Notification requirements. Notifications must be sent to
<a href="/cdn-cgi/l/email-protection#de9b9f8c8cbbaeb1acaaad9ebcb7adf0bab1bdf0b9b1a8"><span class="__cf_email__" data-cfemail="256064777740554a57515665474c560b414a460b424a53">[email protected]</span></a>. Subject line `LE RFF Notification pursuant to
(d)(1)' for notifications required under (d)(1) and with the subject
line `LE RFF Notification pursuant to (d)(2)' for notifications
required under (d)(2) of this section.
(1) 45-Days Prior. 45 days prior to exporting, reexporting,
exporting from abroad, or transferring (in-country) items eligible
under this license exception, a notification must be sent to BIS that
includes the end-user's name and address, description of item(s),
purchase price, and anticipated shipping date of shipment.
(2) Within one business day. If you gain ``knowledge'' that the end
use has changed to ``advance-node integrated circuit'' ``production,''
you must notify BIS within one business day.
(e) Reporting requirements. Reports must be provided in electronic
form. Recommended file formats for electronic submission include
spreadsheets, tabular text, or structured text. Submitters may request
other reporting arrangements with BIS to better reflect their business
models. Reports are to be sent electronically to BIS at the email
address: <a href="/cdn-cgi/l/email-protection#c085819292a5b0afb2b4b380a2a9b3eea4afa3eea7afb6"><span class="__cf_email__" data-cfemail="703531222215001f020403301219035e141f135e171f06">[email protected]</span></a>. Subject line Attn: LE RFF Installation
Reports for paragraph (e)(1) or Attn: LE RFF Annual Confirmation Report
for paragraph (e)(2) of this section.
(1) Installation. Within 30 days of installation of semiconductor
manufacturing equipment, you must submit a report to BIS that includes
the end-user's name and address, description of equipment that was
installed, and date of installation. This email should reference
previous notifications sent to BIS, including notifications.
(2) Annual end-use confirmation. On February 1 of each year that
the exporter, reexporter, or transferor is continuing to provide
service or for at least for five years from the date of last service,
you must submit a report to BIS that you have confirmed that the
installed semiconductor manufacturing equipment is not being used in
the production of ``advanced-node integrated circuits.''
* * * * *
PART 742--CONTROL POLICY--CCL BASED CONTROLS
0
14. The authority citation for part 742 continues to read as follows:
Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50
U.S.C. 1701 et seq.; 22 U.S.C. 3201 et seq.; 42 U.S.C. 2139a; 22
U.S.C. 7201 et seq.; 22 U.S.C. 7210; Sec. 1503, Pub. L. 108-11, 117
Stat. 559; E.O. 12058, 43 FR 20947, 3 CFR, 1978 Comp., p. 179; E.O.
12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 608; E.O. 12938, 59 FR
59099, 3 CFR, 1994 Comp., p. 950; E.O. 13026, 61 FR 58767, 3 CFR,
1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p.
783; Presidential Determination 2003-23, 68 FR 26459, 3 CFR, 2004
Comp., p. 320; Notice of November 7, 2024, 89 FR 88867 (November 8,
2024).
0
15. Section 742.4 is amended by:
(a) Revising paragraph (a)(4);
(b) Redesignating paragraphs (a)(5)(ii)(B)(i) and (ii) as
paragraphs (a)(5)(ii)(B)(1) and (2); and
(c) Revising paragraph (b)(2).
The revisions read as follows:
Sec. 742.4 National security.
(a) * * *
(4) Certain semiconductor manufacturing equipment and associated
software and technology--(i) Scope. A license is required for exports,
reexports, exports from abroad, and transfers (in-country) to or within
either Macau or a destination specified in Country Group D:5 in
supplement no. 1 to part 740 of the EAR of items specified in
3B001.a.4, c, d, f.1, f.5, k to n, p.2, p.4, r, 3B002.c, 3D992, or
3E992.
[[Page 96816]]
(ii) Exclusions. The license requirements in this paragraph (a)(4)
do not apply to any of the following:
(A) Deemed exports or deemed reexports.
(B) An item subject to the EAR pursuant to Sec. Sec. 734.4(a)(8)
or 734.9(k) if the item is reexported or exported from abroad by an
entity located in a country specified in supplement no. 4 to this part,
and the entity is not headquartered or have an ultimate parent company
headquartered in either Macau or a destination specified in Country
Group D:5.
(C) An item subject to the EAR pursuant to Sec. Sec. 734.4(a)(8)
or 734.9(k) if the item is reexported or exported from abroad by an
entity located in a country that has implemented equivalent controls
for items specified in paragraph (a)(4)(i) of this section, and the
entity is not head
[…truncated; see source link]Indexed from Federal Register on December 5, 2024.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.