BIS Expands Foreign-Produced Direct Product Rule With Regard to Huawei

The Commerce Department’s Bureau of Industry and Security has announced an Interim Final Rule amending the Export Administration Regulation’s General Prohibition Three, the foreign-produced direct product rule.

According to the accompanying press release, the rule change makes the following foreign-produced items subject to the EAR:

  • Items, such as semiconductor designs, when produced by Huawei and its affiliates on the Entity List (e.g., HiSilicon), that are the direct product of certain U.S. Commerce Control List (CCL) software and technology; and
  •  Items, such as chipsets, when produced from the design specifications of Huawei or an affiliate on the Entity List (e.g., HiSilicon), that are the direct product of certain semiconductor manufacturing equipment located outside the United States.  Such foreign-produced items will require a license when there is knowledge (or reason to know) that they are destined for reexport, export from abroad, or transfer (in-country) to Huawei or any of its affiliates on the Entity List.

The interim final rule is effective as of 15 May 2020.  Comments must be submitted by 14 July 2020.

 

 Authored by Anthony Capobianco, Aleksandar Dukic, Ajay Kuntamukkala, Beth Peters, Stephen Propst, Adam Berry and Andrea Fraser-Reid

Contacts
Anthony V Capobianco
Partner
Washington, D.C.
Aleksandar Dukic
Partner
Washington, D.C.
Ajay Kuntamukkala
Partner
Washington, D.C.
Beth Peters
Partner
Washington, D.C.
Stephen Propst
Partner
Washington, D.C.
Adam Berry
Senior Associate
Washington D.C.

 

This website is operated by Hogan Lovells Solutions Limited, whose registered office is at 21 Holborn Viaduct, London, United Kingdom, EC1A 2DY. Hogan Lovells Solutions Limited is a wholly-owned subsidiary of Hogan Lovells International LLP but is not itself a law firm. For further details of Hogan Lovells Solutions Limited and the international legal practice that comprises Hogan Lovells International LLP, Hogan Lovells US LLP and their affiliated businesses ("Hogan Lovells"), please see our Legal Notices page. © 2020 Hogan Lovells.

Attorney advertising. Prior results do not guarantee a similar outcome.