BIS Revises Export Review Policy for Advanced AI Chips Destined for China and Macau

The licensing review policy has shifted from a presumption of denial to case-by-case licensing with strict conditions. This new export policy occurred in parallel with an increase in US tariffs on semiconductors with the same performance thresholds.  

The US Department of Commerce’s Bureau of Industry and Security (BIS) has published a final rule effective January 15, 2026 that changes the export license review policy for certain advanced computing semiconductors destined for the People’s Republic of China (PRC) and Macau.

Under the previous review policy, license applications for high-performance artificial intelligence (AI) chips to these destinations were subject to a presumption of denial, effectively barring their export.

The new rule marks a notable shift: license applications for specific AI chips will now be evaluated on a case-by-case basis, provided that the exports meet a series of rigorous supply, security, and testing conditions. This calibrated approach is intended to balance support for the export and adoption of US AI-related technology with the need to protect US national security interests.

NEW CASE-BY-CASE LICENSE REVIEW FOR CERTAIN CHIPS

The relaxed review policy applies only to a narrow category of advanced computing chips that fall below defined performance thresholds. In particular, eligible semiconductors must have a total processing performance (TPP) of less than 21,000 (as defined in the EAR Category 3A090 technical notes) and a total DRAM bandwidth below 6,500 GB/s.

These technical limits correspond to chips roughly at the level of NVIDIA’s H200 GPU and AMD’s MI325X accelerator, which BIS cites as examples of the covered semiconductors. In essence, chips that are less advanced than the current cutting-edge (as measured by TPP and memory bandwidth) may now be considered for export licenses to China/Macau on a case-specific basis, rather than being categorically denied.

This is a significant change from the blanket presumption of denial that has applied to high-end AI chips since 2022. Previously, any chip exceeding the control thresholds (introduced in earlier BIS rules[1]) could not be exported to China without a license that was unlikely to be granted.

Now, for chips under the new thresholds BIS will weigh license applications individually, assessing the circumstances and certifications discussed below. Notably, the chips must also be “commercially available” in the United States as of the rule’s publication, indicating that only models already on the US market (not bespoke designs solely for export) are eligible for this case-by-case review.

PARALLEL CHANGE IN US TARIFF POLICY

On January 14, 2026, the White House further announced an immediate 25% tariff on a narrow group of products—semiconductors with the same performance thresholds—following completion of an investigation pursuant to Section 232 of the Trade Expansion Act of 1962.

The Department of Commerce determined that imported semiconductors, semiconductor manufacturing equipment, and derivative products threatened to impair the national security of the United States. In announcing the tariff, the president tied it to the administration’s prior policy announcement that it would authorize the export of H200s to the PRC and Macao, subject to 25% of the revenue.

Imported semiconductors are not subject to the new tariffs if they are imported for use in a range of domestic programs, including in US data centers, for US-based research and development, in US startups, for non–data center consumer and civil industrial applications, in US public sector applications, or other uses approved by the Secretary of Commerce.

The administration framed the tariffs as targeting semiconductors that are destined for locations outside of the United States, while protecting domestic usage. However, repair and replacement performed in the United States is also protected, with an implication that the item imported for repair or replacement would be returned to its owner.

While the current impact of this Section 232 order is limited, the proclamation announcing the tariffs notes that the president “may consider imposing significant tariffs” on a broader grouping of products depending on the status of ongoing bilateral trade negotiations. It further indicates the possibility of a tariff offset program to encourage domestic manufacturing. The door to increased or expanded tariffs under this investigation remains open.

STRINGENT CERTIFICATION REQUIREMENTS FOR APPROVAL

While the licensing policy shifts create a pathway for exporting certain AI chips to China/Macau, BIS has imposed strict certification requirements and safeguards that exporters must meet to qualify for case-by-case license consideration.

The new rule, effective as of its January 15 official publication, effectively requires intended recipients to adopt and demonstrate to the US government’s satisfaction a compliance framework to ensure that any approved exports will not undermine US supply or security interests.

Specifically, an exporter seeking the case-by-case review must certify in its license application that all of the following conditions are met:

• The chip model is already commercially available in the United States, and the exporter must report how many units of the item have been sold to US customers for use in the United States as of the application date. This ensures transparency about the chip’s domestic availability and baseline performance specifications (including its TPP, total DRAM bandwidth, interconnect bandwidth, copackaged memory, etc., as required in the application).
• The exporter certifies that there is sufficient supply in the US market such that filling the China/Macau order will not delay or deprive any US end-user orders for advanced-node chips. Further, the manufacturer must show that global semiconductor foundry capacity will not be diverted away from producing similar or more advanced chips for US customers in order to manufacture the items for China/Macau.
• The aggregate shipments of the chip to China and Macau must account for no more than 50% of the total quantity of that product that the exporter has shipped to US customers for end-use in the United States. This condition ensures that at least half of the product’s supply serves the US market, reinforcing that China/Macau cannot become the dominant recipient of the chip. Per BIS’s guidance, the 50% metric may be measured in terms of units or overall performance capacity shipped to prevent disproportionate allocation of computing power to China/Macau.
• The transaction must not be for any prohibited end-use or end-user under US export controls. The exporter must ensure the chips will not be used for military, intelligence, or weapons-related purposes (such as WMD development) and that no party to the deal is on a restricted list or otherwise barred by Part 744 of the EAR (e.g., Entity List, Military End-User List). In addition, the exporter must confirm that no banned end-users will be given access to these chips, even remotely or after the sale.
• The ultimate consignee in China/Macau (typically the importing customer or distributor) must implement rigorous Know Your Customer procedures to vet its own customers and users. This includes screening to prevent any unauthorized third parties—particularly those on US prohibited lists or tied to foreign militaries—from gaining remote access to the exported chips. The rule anticipates scenarios such as cloud service providers or data centers renting out AI compute power; the consignee must safeguard that no blacklisted or otherwise impermissible entities can utilize the chips through such arrangements. Furthermore, if the chips will be used in an Infrastructure-as-a-Service (IaaS) context, the exporter must identify any intended remote end-users in countries of concern (e.g., China, Russia, Iran) and ensure that compliance mechanisms are in place to block illicit access. This is a significant departure from longstanding BIS policy that remote access to cloud services, without more, is not an “export”—and perhaps portends a reconsideration of that policy in the face of recent criticism from members of the US Congress and Washington, DC “think tank” policy organizations.
• Before each export shipment, the AI chips must undergo a review by a qualified independent testing laboratory in the United States. The lab must test and certify that the chips’ performance characteristics are as represented in the license application and do not exceed the controlled thresholds. To qualify, the lab itself must be US-headquartered (with no ownership ties to China or other embargoed countries) and must conduct the testing on US soil. The lab also must not be financially affiliated with the exporter or end-user, ensuring true independence. The exporter is required to obtain a written confirmation from the lab for each shipment and provide that confirmation to BIS prior to export, verifying that the chips meet the approved specifications.

These certifications and conditions are now a formal part of the licensing process. BIS has added a new paragraph (dd) to Supplement No. 2 of EAR Part 748 (Unique Application and Submission Requirements) to enumerate the above requirements. Exporters must include a detailed certification statement addressing all the listed conditions in their license application for the covered AI chips.

SCOPE OF THE POLICY AND REMAINING LIMITATIONS

Contrary to initial impressions, the license review policy change is limited in scope. The case-by-case review policy applies only to direct exports from the United States to end-users located in China or Macau, for chips meeting the narrow performance criteria and robust certification conditions described above.

It also focuses on a demonstration that US end-use and end-user catchall provisions will be respected and rigorous due diligence is performed. Many of these catchall provisions turn on “knowledge,” defined to include “an awareness of a high probability,” effectively requiring companies to adopt processes for identifying and if possible mitigating “red flags” indicating potential violations of those catchall provisions.

All other scenarios remain under stringent control. In particular, license applications for any reexports or transfers of these advanced computing chips from third countries to China or Macau will still be reviewed under a presumption of denial. Likewise, exports to other arms-embargoed destinations (Country Group D:5 nations beyond China) are not eased by this rule; those remain subject to denial barring rare exceptions.

BIS also seeks to prevent circumvention via intermediary countries. The rule explicitly retains a presumption of denial if the end-user (or any party to the transaction) is an entity headquartered in, or whose ultimate parent company is headquartered in, a Country Group D:5 country (or Macau).

In practice, this means a company based in China or a US-arms-embargoed nation cannot evade the rules by routing an order through a subsidiary in a third country. For example, an export of an eligible AI chip to a customer in Singapore would still be denied if that Singapore customer is owned or controlled by a Chinese (D:5) parent. The bottom line is that the new case-by-case policy is narrowly targeted to bona fide end-users in China or Macau themselves, and does not open the door for broader distribution of these chips to other restricted countries or through opaque corporate structures.

TAKEAWAYS FOR EXPORTERS AND COMPLIANCE PROGRAMS

Companies that manufacture or export advanced AI and high-performance computing chips should carefully assess how this regulatory change affects their compliance strategies. On one hand, the new rule provides a potential avenue for securing licenses for certain previously unexportable chips, which could restore some access to the China market for US chipmakers. On the other hand, the compliance bar is set very high: exporters will need to develop robust internal processes to meet BIS’s detailed certification requirements.

Key Considerations

Data Gathering and Recordkeeping

Businesses must track and document their domestic sales and supply levels for each relevant chip model. License applications will require disclosing exactly how many units have been sold for US use and demonstrating that ample inventory exists to cover US demand. Compliance teams should set up reporting mechanisms with sales and supply chain departments to regularly update these figures. They also need to monitor the ratio of US versus China/Macau shipments for each product to ensure the 50% export cap is not breached.

Foundry and Production Planning

The rule’s focus on non-diversion of foundry capacity means companies should coordinate closely with their chip fabricators and production planners. Exporters will likely need written assurances or analyses showing that manufacturing chips for China will not cannibalize capacity needed for US orders. This may involve scheduling production in a way that prioritizes US demand or using excess capacity for the export orders. Expect BIS to scrutinize such claims; maintain clear documentation (e.g., production forecasts and capacity utilization reports) to back up the certification.

Enhanced Risk-Based Diligence on End-Users

The due diligence burden is significantly heightened under the new policy. Exporters must thoroughly vet Chinese customers and “clearly enumerate” any known “downstream” end-users of the chips. Standard restricted-party screening may not be enough to overcome “red flags” that might put parties to an export transaction on “an awareness of a high probability” of a violation. Accordingly, risk-based compliance programs may need to be enhanced to verify that no entity, directly or indirectly involved, is on the Entity List or military end-user list, and that the end-use is purely commercial/civilian.

Given these due diligence requirements, US companies may also need to obtain detailed information from the Chinese purchaser about its own customers (if the chips will be resold or integrated into services). While as a baseline it will continue to be prudent to incorporate contractual certifications or attestations from the buyer regarding compliance with the prohibited end-use rules and remote access restrictions, as recent enforcement actions have shown these self-certifications are not enough to overcome other data points that are “red flags” indicating a high probability that the self-certifications are false.

Controls on Remote Access and IaaS

If the chips are destined for cloud service providers, data centers, or other scenarios where AI compute might be offered as a service, the exporter should ensure that the ultimate consignee has adequate controls to prevent prohibited remote users from accessing the technology. This might entail technical safeguards (such as network geo-fencing or user verification processes) and administrative policies to block any login or data transfer to users in the sanctioned countries listed in the rule.

Exporters should discuss and verify these safeguards with the customer in advance, since BIS now requires listing any known “remote” end-users in certain countries as part of the license application. Specifically, exporters must describe “physical security measures adopted by the ultimate consignee/customer” and “stipulate that the receiving facility will also manage and limit Infrastructure as a Service (including AI model training and inference) for its customers to prevent unauthorized access to these advanced computing commodities.”

Companies may also consider obtaining periodic certifications from the consignee that no forbidden end-users have been given access to the chips or any AI models trained with them. As noted above, this is a significant departure from longstanding BIS policy and likely will require new methodologies for identifying and assessing the risk of violating this condition.

Third-Party Testing Logistics

Compliance programs will need to incorporate the step of third-party lab testing for each export shipment. This is a new practical hurdle; companies must identify and engage a qualified US-based laboratory that meets BIS’s criteria. Export managers should build in extra lead time and budget for the lab to test the hardware and issue the required certification before the product ships.

It is advisable to establish a relationship with an approved lab early, communicate the chip specifications, and perhaps even run trial test sessions to iron out any technical issues. Internally, businesses should create procedures to ensure no shipment is released until the lab’s green light and the test report has been submitted to BIS in SNAP-R (the online license system). Failing to do so could invalidate the license or lead to penalties.

Monitor Policy Updates

The introduction of this case-by-case review pathway suggests BIS is fine-tuning its export controls in response to technological and market developments. Companies should stay alert to further changes; for example, BIS might adjust the performance thresholds or expand the certification requirements over time.

Regular review of BIS guidance and consultation with legal counsel is recommended as the regime for advanced computing exports to China continues to evolve. Stakeholders should also track congressional activity that could further refine these restrictions, including proposals such as H.R. 6996 (the Full AI Stack Export Promotion Act), which could either ease or tighten controls on the export of US advanced chips and related infrastructure.

As 2026 unfolds, US semiconductor policy continues to evolve, seeking to balance national security concerns with economic and trade considerations. Companies will need to monitor these changes closely to maintain compliance.

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