Lawmaker Presses BIS About Possible Use of FDP Rule for Advanced Chip Tools

Sen. Chris Van Hollen, D-Md., questioned a senior Bureau of Industry and Security official this week about whether the agency would consider using its foreign direct product rule to impose more license restrictions on foreign exports of advanced chipmaking equipment to China.

Speaking during a July 25 Senate Banking Committee hearing, Van Hollen asked Thea Kendler, the BIS assistant secretary for export administration, whether the agency would consider using its FDP rule to better restrict certain foreign chip shipments. The rule, which places export license restrictions on certain foreign-made items that are made with U.S.-origin software or technology, “is obviously an escalatory measure,” Van Hollen said, “but one that may help get people's attention to secure their cooperation.”

BIS has pressed its allies, including the Netherlands and Japan, to impose stronger controls around exports of certain advanced semiconductor equipment to China (see 2407170040 and 2403270038), including by aligning their controls with restrictions imposed by BIS (see 2310170055). Although both countries have imposed some restrictions, Van Hollen said “my understanding is that there may not be the progress that we'd anticipated.”

Kendler declined to say whether BIS would use the FDP rule for chip equipment. “We have increasingly used that as a tool,” she said, calling it a “heavy measure.” She added that she would be “happy" to talk with Van Hollen "about when and what circumstances might be appropriate.”

She also said “multilateral coordination is crucial to export controls,” and said the chip restrictions imposed by the Dutch and the Japanese are “comparable to ours.”

“We're constantly building export control coalitions around the world on different critical and emerging technologies like semiconductors,” Kendler said.

BIS in October 2022 created two FDP rules involving certain advanced semiconductors and ​​supercomputer end-uses (see 2210070049).