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Chip Industry Struggling With Complex BIS Rules, Seeking Clearer Guidance, Export Compliance Daily

Wednesday, November 2, 2022

Partner Giovanna Cinelli discussed export controls on advanced computing and semiconductor equipment destined for China recently announced by the US government with Export Compliance Daily

The controls impose new restrictions on China’s ability to acquire advanced computing chips and manufacture advanced semiconductors.

Referring to the US Department of Commerce’s Bureau of Industry and Security (BIS), Giovanna asked, “What does BIS mean when they recommend enhanced diligence?”

“If I already screen, I already keep records, I already collect compliance certifications or end-user declarations and I already screen at the time of shipment, what additional steps would be considered sufficient to meet the standard?”

Giovanna observed that the BIS’ inclusion of a new model certificate in the regulations—which can be used by exporters to require other parties in a transaction to certify that they are not violating the BIS’ new advanced computing foreign direct product rule—isn’t a novel compliance approach. “It’s nothing new,” she said.

“Most companies conduct that kind of diligence anyway.”

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