Implementation of Additional Export Controls: Certain Advanced Computing and Semiconductor Manufacturing Items; Supercomputer and Semiconductor End Use; Entity List Modification

Summary

This interim final rule issued by the Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) to impose strict export controls on advanced computing integrated circuits, supercomputer end-uses, and semiconductor manufacturing equipment destined for the People’s Republic of China (PRC). It establishes new Foreign Direct Product (FDP) rules, restricts ‘U.S. persons’ support for advanced semiconductor fabrication in China, and subjects 28 PRC entities to enhanced Entity List restrictions under Footnote 4.

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DEPARTMENT OF COMMERCE Bureau of Industry and Security 15 CFR Parts 734, 736, 740, 742, 744, 762, 772, and 774 [Docket No. 220930–0204] RIN 0694–AI94

AGENCY: Bureau of Industry and Security, Department of Commerce. ACTION: Interim final rule; request for comments.

SUMMARY: In this rule, the Bureau of Industry and Security (BIS) is amending the Export Administration Regulations (EAR) to implement necessary controls on advanced computing integrated circuits (ICs), computer commodities that contain such ICs, and certain semiconductor manufacturing items. In addition, BIS is expanding controls on transactions involving items for supercomputer and semiconductor manufacturing end uses, for example, this rule expands the scope of foreign-produced items subject to license requirements for twenty-eight existing entities on the Entity List that are located in China. BIS is also informing the public that specific activities of ”U.S. persons” that ‘support’ the ”development” or ”production” of certain ICs in the PRC require a license. Lastly, to minimize short term impact on the semiconductor supply chain from this rule, BIS is establishing a Temporary General License to permit specific, limited manufacturing activities in China related to items destined for use outside China and is identifying a model certificate that may be used in compliance programs to assist, along with other measures, in conducting due diligence.

DATES: a. Effective on October 7, 2022, are the following instructions: 7 (§ 740.2), 9 (§ 740.10), 11 (§ 742.6), 17 (§ 744.23), and 25 (supplement no. 1 to part 774). b. Effective on October 12, 2022, is the following instruction: 15 (§ 744.6). c. Effective on October 21, 2022, are the following instructions: 2 (§ 734.9), 3 (supplement no. 1 to part 734), 5 (supplement no. 1 to part 736), 8 (§ 740.2), 12 (§ 742.6), 14 (§ 744.1), 16 (§ 744.11), 18 (§ 744.23), 19 (supplement no. 4 to part 744), 21 (§ 762.2), 23 (§ 772.1), and 26 (supplement no. 1 to part 774). d. Comments must be received by BIS no later than December 12, 2022.

ADDRESSES: Comments on this rule may be submitted to the Federal rulemaking portal (www.regulations.gov). The regulations.gov ID for this rule is: BIS–2022–0025. Please refer to RIN 0694–AI94 in all comments.

FOR FURTHER INFORMATION CONTACT: Eileen Albanese, Director, Office of National Security and Technology Transfer Controls, Bureau of Industry and Security, Department of Commerce, Phone: (202) 482–0092, Fax: (202) 482–3355, Email: [email protected]. Chair, End-User Review Committee, Office of the Assistant Secretary for Export Administration, Bureau of Industry and Security, Phone: (202) 482–5991, Email: [email protected].

SUPPLEMENTARY INFORMATION: I. Background With this interim final rule, BIS makes critical changes to the EAR in two areas to address U.S. national security and foreign policy concerns: (1) additional export controls on certain advanced computing semiconductor chips, transactions for supercomputer end-uses, and transactions involving certain entities on the Entity List; and (2) additional controls on certain semiconductor manufacturing items and transactions for certain IC end use. A. Additional Export Controls: Certain Advanced Computing Integrated Circuits (ICs); Supercomputer End-Uses; Entity List Modifications Advanced computing items and ”supercomputers” can be used to enhance data processing and analysis capabilities, including through artificial intelligence (AI) applications. The PRC is rapidly developing exascale supercomputing capabilities and has announced its intent to become the world leader in AI by 2030.

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These advanced systems are being used by the PRC for military modernization efforts to improve the speed and accuracy of military decision making, planning, and logistics, autonomous military systems (cognitive electronic warfare, radar, signals intelligence, jamming), weapons design and testing including WMD (nuclear weapons, hypersonics, advanced missile systems), and battlefield effects analysis. Furthermore, advanced AI surveillance tools are being used by the PRC to monitor, track, and surveil citizens without regard for basic human rights. These items have been controlled for Regional Stability (RS) purposes. This rule also expands licensing requirements for 28 existing PRC entities on the Entity List.

B. Additional Export Controls: Certain Semiconductor Manufacturing Items; Integrated Circuits End Use BIS imposes new export controls on certain semiconductor manufacturing items and activities involving the ”development” or ”production” of advanced ICs in the PRC that meet specified criteria (logic ICs with non-planar architectures or technology nodes of 16/14nm or less; DRAM of 18nm half-pitch or less; NAND flash memory with 128 layers or more). Under ECRA, U.S. person ‘support’ for producing advanced semiconductors for military/WMD programs requires a license even when precise end-use cannot be determined.

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II. Item-Based Controls on Semiconductor Manufacturing Equipment Effective October 7, 2022, specified semiconductor manufacturing equipment is controlled for RS reasons under the EAR.

III. Overview of New Controls for Certain Advanced Computing Integrated Circuits (ICs); Supercomputer End-Uses; Entity List Modifications (1) Addition to CCL of new ECCNs 3A090 (high-performance ICs) and 4A090 (computers and assemblies containing 3A090 ICs), controlled for RS reasons to PRC (§ 742.6(a)(6)) and AT:1 reasons. Associated software/technology controlled under 3D001, 3E001, 4D090, 4E001. RS license requirements also added to 5A992 and 5D992 when exceeding 3A090/4A090 parameters. (2) License Requirements for New Advanced Computing Items: License applications reviewed under presumption of denial, except case-by-case review for semiconductor manufacturing items destined to facilities in China headquartered in the U.S. or Country Group A:5/A:6. (3) Worldwide license requirement for export from China of 3E001 (for 3A090) technology developed by PRC-headquartered entities that is the direct product of EAR software.

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C. Anti-Terrorism Controls for Lower-Level Computing ICs and Computer Commodities That Contain Them Revises ECCN 3A991 (adding 3A991.p) and ECCN 4A994 (adding 4A994.l), controlled for AT Column 1 reasons.

D. License Exception Eligibility for New Advanced Computing Items Only limited license exceptions are available under § 740.2(a)(9): RPL (§ 740.10), GOV (§ 740.11(b)(2)(ii)), and TSU (§ 740.13(a) and (c)). No license exceptions overcome § 744.23.

E. Revising the Entity List Foreign Direct Product Rule Under § 734.9(e) and Establishing Two New Foreign Direct Product Rules for Advanced Computing and ”Supercomputers” Under § 734.9(h) and (i) Revises § 734.9(e) to establish Footnote 4 Entity List FDP rule. Adds Advanced Computing FDP rule (§ 734.9(h)) and Supercomputer end-use FDP rule (§ 734.9(i)).

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F. Instituting a New End-Use and End-User Control for ”Supercomputers” Under § 744.23 of the EAR Imposes restrictions on exports, reexports, and transfers (in-country) destined for PRC supercomputers or advanced semiconductor fabrication facilities in China. Adds definition of ‘Supercomputer’ to § 772.1: collective maximum theoretical compute capacity of 100+ double-precision (64-bit) petaflops or 200+ single-precision (32-bit) petaflops within 41,600 cubic feet or smaller envelope.

G. Revisions to the Entity List Under Supplement No. 4 to Part 744 of the EAR 28 Chinese entities designated with Footnote 4 on the Entity List.

IV. Overview of New Controls: Semiconductor Manufacturing Items & End Use Adds ECCN 3B090. Amends § 744.6 to restrict ‘support’ by U.S. persons to PRC advanced semiconductor fabrication facilities.

V. Measures To Minimize Short Term Impacts on Supply Chains A. Certification of Compliance With New FDP Rule (§ 734.9(h)(3) and Supplement No. 1 to Part 734). B. Temporary General License (TGL) (Supplement No. 1 to Part 736) from Oct 21, 2022, through April 7, 2023, for non-D:1/D:5/E headquartered companies for integration, testing, quality assurance, distribution outside of China. Savings Clause provided for shipments en route before Oct 7, 2022, exported before Nov 7, 2022.

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Summary of Specific Rule Amendments to 15 CFR:

Part 734: § 734.9 amended with revised paragraph (e) (Footnote 1 and Footnote 4 FDP rules), paragraph (h) (Advanced Computing FDP rule), and paragraph (i) (Supercomputer FDP rule). Supplement No. 1 to Part 734 added (Model Certification for Advanced Computing FDP).
Part 736: Supplement No. 1 to Part 736 amended to add General Order No. 4 (Temporary General License).
Part 740: § 740.2(a)(9) added/revised to restrict license exceptions for 3A090, 3B090, 4A090, and associated items to RPL, GOV, and TSU.
Part 742: § 742.6 amended to add RS controls on PRC exports for semiconductor manufacturing equipment (3B090) and advanced computing items (3A090, 4A090, 5A992/5D992 equivalents).
Part 744: § 744.6 amended to restrict U.S. persons servicing, shipping, or facilitating items to PRC advanced IC fabrication facilities. § 744.11 amended for Footnote 4 entities. § 744.23 added for supercomputer and semiconductor manufacturing end-use controls.
Part 762: § 762.2 amended to include recordkeeping for § 734.9(h) certifications.
Part 772: Definition for ‘Supercomputer’ added.
Part 774: Commerce Control List amended by adding ECCNs 3B090, 3A090, 4A090, 4D090, and revising ECCNs 3A991, 3B991, 3D001, 3E001, 4A994, 4D994, 4E001, 5A992, 5D992.