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On October 7, 2022, the U.S. Bureau of Industry and Security announced a series of targeted updates to export controls in response to Congress's decision to limit the People's Republic of China's (PRC) access to advanced computing chips. These export controls specifically focus on advanced computing chips and semiconductors, which Congress believes the PRC is using for the development of malicious surveillance technologies. Since BIS released this statement, there has been a complete halt in the export of advanced computing and semiconductor manufacturing components to the PRC, with only a few exceptions. However, the U.S. government has allowed special licenses for companies with supply chains in the PRC that do not directly serve the country.
BIS has recently introduced a new license type called Temporary General License Codes C65. These temporary licenses authorize certain exports, reexports, in-country transfers, and exports from abroad destined to or within China or Macau by companies not headquartered in specific Country groups. These licenses allow companies to continue or engage in integration, assembly, inspection, testing, quality assurance, and distribution of items classified under the ECCN's for electronics and computers, which include:
ECCN 3A090 - Integrated Circuits (refer to List of Items Controlled)
ECCN 4A090 - Computers (refer to List of Items Controlled) and related equipment, "electronic assemblies," and "components" thereof
ECCN 3D001 - "Software" "specifically designed" for the "development" or "production" of commodities controlled by 3A001.b to 3A002.h, 3A090, or 3B (except 3B991 and 3B992)
ECCN 3E001 - "Technology" according to the General Technology Note for the "development" or "production" of commodities controlled by 3A (except 3A980, 3A981, 3A991, 3A992, or 3A999), 3B (except 3B991 or 3B992), or 3C (except 3C992)
ECCN 4D090 - "Software" "specially designed" or modified for the "development" or "production" of computers and related equipment, "electronic assemblies," and "components" specified in ECCN 4A090
ECCN 4E001 - "Technology" (refer to List of Items Controlled) OR "any item that is a computer, integrated circuit, 'electronic assembly,' or 'component' and associated software and technology specified elsewhere on the Commerce Control List
The temporary general license also considers other license requirements such as §744.11 or 744.21, leading to various nuances. Baseline requirements, including declarations regarding end uses and end users, still apply.
Are you confused by this new Temporary General License? Are you having trouble understanding the ECCN system and how it applies to this license? Do you think you will have a problem with your business in the future?
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