Background

Effective Feb. 3, the Bureau of Industry and Security is making the following changes to clarify, reorganize, and make minor corrections to provisions of the foreign-direct product rules, which impose controls on exports of goods made outside the U.S. with certain U.S. technology.

- consolidates the FDP rules in section 734.9 of the Export Administration Regulations to clarify that they are used to determine if a foreign-produced item is subject to, and thus within the scope of, the EAR

- separates the FDP provisions in new 734.9 into four paragraphs to facilitate reference to and compliance with the rules

- clarifies that the definition of the term “major component” (of a plant located outside the U.S.) applies to all FDP rules, not just the Entity List FDP rule

- clarifies that foreign-direct products subject to the EAR are not necessarily subject to a license requirement and that license requirements must be determined based on an assessment of the classification, destination, end-user, and end-user of the items

- clarifies the circumstances under which the 600 series FDP rule applies to items described in ECCN OA919

- specifically states in each FDP rule that the application of the rule relates to U.S.-origin technology or software

- moves the license requirement, license review policy, and license exception applicability text for listed entities from the Entity List’s footnote 1 to supplement no. 4 to part 744 to section 744.11, where the overall license requirements pertaining to listed entities are located

For more information on defense export rules and regulations, please contact attorney Kristine Pirnia via email.

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