On January 18, 2023, the Department of Commerce’s Bureau of Industry and Security (BIS) issued an Interim Final Rule extending export controls currently in place for China on advanced computing integrated circuits (ICs), computer commodities that contain such ICs, and certain semiconductor manufacturing items to the Macau Special Administrative Region of China (“Macau”). While China grants Macau limited autonomy in economic and commercial relations under the principle of “one country, two systems”, BIS nevertheless determined that as a Special Administrative Region of China there is the potential risk of diversion of such critical items from Macau to China.
This rule adds the destination of Macau to the scope of the Regional Stability (RS) export controls under the Export Administration Regulations (EAR) that were implemented specific to China in the detailed October 2022 advanced computing and semiconductor manufacturing equipment rule issued by BIS. See Thompson Hine Update of October 31, 2022 for details. The following seven Export Control Classification Numbers (ECCNs) are directly impacted: 3A090, 3B090, 3D001, 3E001, 4A090, 4D090, and 4E001. The availability of License Exceptions will also be restricted; and U.S. persons may not knowingly export, reexport, or transfer items controlled for Macau under the scope of this rulemaking if the intended end-use involves ICs, supercomputers or other development or production equipment at semiconductor facilities.
In addition, this rule expands the scope of the EAR’s foreign-direct product rules to Macau. Thus, Macau has been added to the destination scope of the Advanced computing FDP rule and the Supercomputer FDP rule. Accordingly, any foreign-produced items that are the direct product of advanced computing or supercomputer-related software or technology that is of U.S. origin or otherwise subject to the EAR would also require a U.S. export license if intended for Macau.
BIS clarified in the Interim Final Rule that this expanded scope of the application of the China advanced computing and semiconductor rule to Macau “does not change the status of Macau; it will continue to be treated as a separate destination from China.” This rule only adds Macau as a destination to which an export license will be required in order to ensure that appropriate controls are in place for these critical ICs and semiconductor items.
This rule was effective as of January 17, 2023. However, as an Interim Final Rule, BIS is accepting public comments on the rule until January 31, 2023. Comments must be submitted via the Federal rulemaking portal (www.regulations.gov) under docket no.: BIS– 2022–0025. Any comments must also reference “RIN 0694– AI94”. BIS will publish a subsequent rule to respond to any comments received, including possibly making updates to the overall export control rules implemented in October 2022 regarding advanced computing and semiconductor manufacturing equipment.