Background

The Bureau of Industry and Security has issued a final rule that, effective Oct. 2, expands the validated end-user program to include data centers located in specified destinations. BIS states that this update will contribute to the development of a trusted ecosystem for the responsible use of advanced computing and artificial intelligence.

Specifically, BIS states, this rule will ensure high standards for physical and cybersecurity at data centers that house advanced AI systems. It will also reduce licensing burdens on industry by allowing data centers to fulfill the stringent requirements of the VEU program up front, enabling U.S. exporters to ship designated items to pre-approved entities under a general authorization instead of under multiple individual export licenses. BIS notes that data center VEU incorporates much of the existing VEU program’s framework while adding new requirements tailored to the needs and security concerns of a data center.

According to BIS, data center operators will only be admitted into the program after a thorough interagency review and approvals by the departments of Commerce, Defense, Energy, and State. In addition, this program may include assurances by the government of the country in which the data center operates, agreement to facilitate on-site data center compliance reviews, commitments to extensive physical and logical security, and new reporting requirements specific to data center operations. Once a data center is authorized under this program it will be identified by name and location(s) in the Export Administration Regulations and at that point may begin receiving items pursuant to the terms of its entity-specific approval under VEU.

For more information on this rule and how it may benefit your business, please contact attorney Kristine Pirnia at (202) 730-4964 or via email.

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