BIS to Issue More China Chip Controls FAQs 'as Soon as Possible,' Official Says

The Bureau of Industry and Security has drafted new guidance for its October rule that expanded certain China-related chip controls (see 2210070049) and hopes to release it soon, said Thea Kendler, the agency’s assistant secretary for export administration. Kendler, speaking during a virtual conference hosted by the Massachusetts Export Center last week, also touched on the rule’s expiring temporary general license and urged industry to submit feedback on the new restrictions before the deadline this week.

Kendler said BIS is working on a new set of frequently asked questions to follow up on the first set of FAQs from October, which offered guidance on certain U.S. persons requirements, the definition of a semiconductor “facility,” license review policies and more (see 2210310044). When asked whether the upcoming set of FAQs will offer additional guidance on U.S. persons activities, Kendler said “absolutely.”

“I committed, I think, in mid-October to publishing FAQs on a rolling basis for this regulation, and that's certainly still the plan,” she said. “I think they’ve come out a little bit more slowly than I originally had hoped, but we do have additional FAQs in draft that I hope will get up on the website as soon as possible.”

The rule also included a temporary general license, set to expire April 7, authorizing specific, limited manufacturing activities in China related to items destined for use outside China. BIS has received questions about “what happens when the TGL expires,” Kendler said, and “in that situation, license applications will be reviewed on a case-by-case basis.”

Kendler urged industry to submit public comments on the rule before the Jan. 31 deadline, saying it will help BIS make revisions to the restrictions. “Please take advantage of this opportunity to tell us the ramifications of this rule on your business, on your relationships, your foreign relationships. The good, the bad, the ugly -- all of it,” she said. “You know the products you design, and we can't do our job properly without your contributions.”

Kendler also spoke about the agency’s export controls against Russia, saying restrictions are significantly damaging the country's defense industrial base. Russian production of hypersonic ballistic missiles has “nearly ceased” due to the controls, she said, and Russia’s car production has “fallen by three quarters” compared with last year.

She noted Russia is buying artillery shells and rockets from North Korea and drones from Iran (see 2301040019). “These are not the partners of choice for a modern military, I would imagine,” Kendler said. “And that certainly shows sanctions and export controls are impacting Russia's ability to supply its military.”

As with its China controls, BIS wants feedback on restrictions imposed against Russia, Kendler said. But she also acknowledged the agency must sometimes respond quickly to national security concerns and “we're not always able to consult as openly as we normally would prefer before we implement new controls.” The agency recognizes “that is challenging for industry and academic compliance.”

Kendler also addressed a question about how export controls affect technology transfers provided through the cloud or exports provided through software as a service. She said “it's fair to say” that any transfer of controlled technology to China and Russia “is a concern,” regardless of how the transfer is made. “If you want to protect yourself,” she said, “I don't think it's wise to be transferring technology that would require a license to China or Russia through the cloud.”