New semiconductor export controls in the US

On October 17, 2023, the Bureau of Industry and Security (BIS) released updated export control regulations concerning the production of semiconductors and advanced computing technology. These rules aim to enhance the oversight of advanced semiconductor exports and mitigate their unauthorized transfer to embargoed countries through affiliated subsidiaries and will go into effect on November 16, 2023.

Expanding semiconductor controls

These new regulation controls specifically strengthen oversight over the four recently introduced Export Control Classification Numbers (ECCNs) established on October 7, 2022. These ECCNs are designed to control equipment and technology related to advanced semiconductors, with the primary aim of restricting China's access to such products. Moreover, it tightens the ease at which these items are being diverted to embargoed nations by mandating licensing for countries suspected of serving as transit points to China. Furthermore, the regulation broadens the entity list to include additional Chinese companies that are suspected of being involved in the development of advanced circuits.

In summary, these new rules are:

• Strengthening the technical control criteria for semiconductors and semiconductor manufacturing equipment as outlined in the October 2022 regulation.

• Implementing licensing mandates for 40 countries outside of China, while also introducing end-use regulations for companies headquartered in China.

• Expanding limitations on the actions of US individuals, particularly concerning interactions with firms from Prohibited Jurisdictions.

• Incorporating additional warning signs to aid in ensuring compliance.
  
  

Recommendations for shippers

Shippers of semiconductors and circuit boards are advised to maintain their due diligence and closely monitor their shipments for any potential red flags or areas of concern. A good resource to use provided by the Bureau of Industry and Security (BIS) for this purpose is the "Know Your Customer" tool, which serves as a valuable guide for individuals and firms on what to look out for and best practices to ensure industry compliance.

DSV remains committed to keeping you informed and assisting you in your business operations so that importing and exporting is as smooth as possible. Should you have any questions or concerns, please reach out to your local DSV representative or email us at customs.services@us.dsv.com.

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