Industry News

BIS "Individual" Notice Impose New Export Licensing Requirement on Certain NVIDIA Chips

Sept. 12, 2022
By: Marvin E. McPherson

The Bureau of Industry and Security has extensive powers to regulate exports under the Export Administration Regulations (“EAR”). Highly compliant exporters are well aware of this. However, BIS recently exercised a less well-known aspect of its authority. Pursuant to powers under Section 744.21 of the EAR, BIS informed NVIDIA and AMD specifically of new export restrictions on certain microchips. BIS stated that the notice came about under a review of existing policies related to China and will potentially seek to employ a variety of legal, regulatory, and, when relevant, enforcement tools to keep advanced technologies out of the wrong hands.

Section 744.21 of the EAR notices are “is informed” let­ters to companies informing them “individually by specific notice … that a license is required for specific exports, reexports, or transfers (in-country) of any item because there is an unacceptable risk of use in or diversion to a ‘military end use’ or ‘military end user’ in Belarus, Burma, Cambodia, China, the Russian Federation, or Venezuela.” These notices do not apply broadly to all companies. However, they are a clear signal of additional (or new) interest in controlling a particular technology. Exporters of similar technology would do well to keep this interest in mind.

Increased export regulation of technology is likely to continue into the future. Under Secretary of Commerce Alan Estevez has stated “that the Commerce Department’s Bureau of Industry and Security successful collaboration with 37 other nations that’s driven down exports to Russia serves as a blueprint for a new regime on tackling threats from China.” It is likely that the United States government will perceive both exports to Russia and tackling threats from China as relevant activities for the foreseeable future.

If you have any questions about the application of the EAR to exports, or any other export related questions do not hesitate to contact any attorney at Barnes, Richardson & Colburn.