BIS Looking to Address ‘Radical Jump’ in Certain Low-Level Chip Exports, Official Says

LONDON -- The Bureau of Industry and Security is noticing a sharp uptick in low-level U.S. microelectronics exports to countries that weren’t involved in semiconductor-related shipments before Russia’s 2022 invasion of Ukraine, said Liz Abraham, senior adviser for international policy at BIS. She said BIS is looking at creative ways to potentially restrict some of those shipments, even though many of them are designated under the Export Administration Regulations as EAR99 -- items that generally don’t require an export license.

Abraham, speaking during a defense industry conference hosted by SAE Media last week, said the agency noticed the uptick while monitoring trade data for red flags that may signal Russia-related export control evasion. “And one of the things that we have seen is just radical changes in export control patterns,” she said. “So we would have destinations where we have no microelectronic traffic at all -- or just very minimal -- and then you see this radical jump.

“And immediately that raises questions.”

She said BIS has spoken to some of the companies and countries involved in these shipments, and is using that information to educate industry and others “of who is out there and what entities are creating these new supply lines.” She said this is “becoming quite problematic” for “those lower-level EAR99 items in the semiconductor chips [and] components space that are broadly distributed, and then they go through distributor channels with multiple levels.”

BIS is “thinking about what that means as far as our controls,” she said. While the agency’s foreign direct product rule “tries to address some of those issues,” Abraham said, “I think we have to start thinking even more creatively on how we capture that space.”