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BIS Examines Application of New Definition of “Specially Designed”

Friday, January 24, 2014
Sandler, Travis & Rosenberg Trade Report

The Bureau of Industry and Security issued recently an advisory opinion on the application of the new definition of “specially designed” in the Export Administration Regulations. This AO concludes that multipurpose die, standard packages, and integrated circuits comprised thereof are not “specially designed” because they (a) were designed with knowledge of use in a wide range of applications, including commodities such as medical equipment, passenger vehicles and consumer electronics, or (b) have the same function and performance capabilities, and the same or equivalent form and fit, as a multipurpose die, standard package, or integrated circuit comprised thereof used in a wide range of applications in production.

For purposes of this AO, “multipurpose die” means a specific die that is used in multiple applications, from commercial and industrial items (including AT-only and EAR99 items) to military items. “Standard package” means a specific package that is an unmodified, commercial, off-the-shelf package widely available, sold in large volume and used in multiple applications. “Integrated circuits comprised thereof” means integrated circuits that are composed of such multipurpose dies and standard packages.

The AO states that for multipurpose die, standard packages and integrated circuits comprised thereof to be released as specially designed under paragraphs (b)(4) or (b)(5) of the definition of that term in 15 CFR 772.1, there must be documentation contemporaneous with the development of such items that, in its totality, demonstrates the criteria of those paragraphs. To be released under paragraph (b)(3), the subject items must have the same function and performance capabilities, and the same or equivalent form and fit, as a commodity or software used in or with an item that (a) is or was in production and (b) is either not enumerated on the Commerce Control List or the U.S. Munitions List or described in an export control classification number controlled only for anti-terrorism reasons.

BIS notes that this AO does not apply to articles subject to the jurisdiction of the International Traffic in Arms Regulations. In addition, any deviation from the facts presented in this case may change the result under the EAR, including whether a particular multipurpose die, standard package, or integrated circuit comprised thereof is specially designed.

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