On January 16, 2025, the US Commerce Department’s Bureau of Industry and Security (“BIS”) issued an interim final rule (“IFR”) related to advanced computing integrated circuits (“ICs”) designed to protect US national security and assist foundries and Outsourced Semiconductor Assembly and Test (“OSAT”) companies in complying with provisions of the US Export Administrations Regulations (“EAR”).

The IFR builds on previous waves of semiconductor export controls published in October 2022, October 2023, April 2024, and December 2024, which we covered in past blogs here, here, here, and here, respectively. This blog post summarizes key aspects of the IFR published on January 16, 2025. Please reach out to the authors or a member of the Baker McKenzie global trade team if you have any questions on the IFR or prior rules. Comments on the IFR are due by March 14, 2025.

IFR Key Provisions

  • Revisions to License Exceptions: The IFR revised License Exception Artificial Intelligence Authorization (“AIA”) and License Exception Advanced Compute Manufacturing (“ACM”) with respect to ECCNs 3A090.a; 5A002.z.1.a, z.2.a, z.3.a, z.4.a, z.5.a; and 5A992.z.1 (“Eligible Commodities”). Under License Exception AIA and License Exception ACM, Eligible Commodities must be designed by an approved or authorized IC designer, as described in Supplement No. 6 to Part 740 of the EAR and Note 1 to ECCN 3A090.a, respectively. This requirement is intended to ensure that foundries and other entities can only use these exceptions if the items have been designed by an entity that presents a low risk of diversion.
  • New Supplements No. 6 and 7 to Part 740 of the EAR: The IFR established two new lists of entities – i.e., lists of approved IC designers (Supplement No. 6) and lists of approved OSAT companies (Supplement No. 7). BIS will conduct supplemental outreach to the companies initially included in Supplements No. 6 and 7 to ensure continued compliance with the EAR, including requirements of this IFR.
  • New Reporting Requirements for Front-End Fabricators: The IFR added new reporting requirements for “front-end fabricators” producing any IC specified in ECCN 3A090.a for authorized IC designers. The purpose of this change is to ensure the US government has visibility into companies that are not listed on the initial approved IC designer list. The IFR also added a new Know Your Customer (“KYC”) Vetting Form to Supplement No. 2 to Part 743 of the EAR. The KYC Vetting Form contains a questionnaire that must be completed as part of the reporting requirements for authorized IC designers.
  • Application Process for Approved IC Designer and Approved OSAT Company Lists: The IFR added an application process for requests for the addition, removal, or modification of approved IC designers in Supplement No. 6 or approved OSAT companies in Supplement No. 7. The IFR established some of the factors used by the End-User Review Committee in evaluating an applicant for eligibility to be listed as an approved IC designer or approved OSAT company. The factors include: (i) the applicant’s record of exclusive engagement in appropriate end-use activities; (ii) the applicant’s compliance with US export controls; (iii) the need for an on-site review prior to approval; (iv) the applicant’s capability of complying with the requirements of being listed as an approved IC designer; (v) the ability of the applicant to guard against both the misuse and diversion of computing resources; and (vi) the applicant’s relationships with US and foreign companies.
  • Clarification of the Scope of ECCN 3A090: The IFR added Note 1 to ECCN 3A090.a to clarify that when “front-end fabricators” or OSAT companies seek to export, reexport, or transfer (in-country) any “applicable advanced logic integrated circuit,” there is a presumption that the item is 3A090.a and designed or marketed for datacenters. The “front-end fabricators” or OSAT companies must comply with all requirements applicable to items specified in 3A090.a., unless the presumption is overcome in certain limited ways.
  • Revisions Related to FDP IFR: Lastly, the IFR made some amendments and clarifications to the EAR for changes related to the interim final rule released by BIS on December 2, 2024, “Foreign-Produced Direct Product Rule Additions, and Refinements to Controls for Advanced Computing and Semiconductor Manufacturing Items,” (“FDP IFR”), including extending the deadline for written comments for the FDP IFR to March 14, 2025. Our prior blog post on the FDP IFR is available here.

Entity List Additions

On January 16, 2025, BIS added 11 entities to the Entity List, under the designation of China. Ten entities were added due to their alleged involvement in advancing China’s military modernization through the development and integration of advanced artificial intelligence research, and one entity was added for its alleged involvement in developing lithography technology for advanced-node fabrication facilities in China. BIS removed 3 entities (i.e., Indian Rare Earths, Indira Gandhi Atomic Research Center, and Bhabha Atomic Research Center) but continued to list the relevant facilities in the Entity List. BIS believes this modification will reduce barriers to advance energy cooperation and enable the United States and India to secure more resilient critical minerals and clean energy supply chains.

On the same day, BIS also added 16 entities to the Entity List, under the designation of Singapore (2) and China (14), for their alleged involvement in supporting or directly contributing to the development of advanced computing ICs that further China’s development of advanced weapons systems and weapons of mass destruction, among others.

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