
[Federal Register Volume 88, Number 205 (Wednesday, October 25, 2023)]
[Rules and Regulations]
[Pages 73424-73455]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-23049]



[[Page 73423]]

Vol. 88

Wednesday,

No. 205

October 25, 2023

Part II





Department of Commerce





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Bureau of Industry and Security





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15 CFR Parts 734, 736, et al.





Export Controls on Semiconductor Manufacturing Items; Final Rule

  Federal Register / Vol. 88, No. 205 / Wednesday, October 25, 2023 / 
Rules and Regulations  

[[Page 73424]]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 734, 736, 740, 742, 744, 772, and 774

[Docket No. 231013-0246]
RIN 0694-AJ23


Export Controls on Semiconductor Manufacturing Items

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Interim final rule; request for comments.

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SUMMARY: On October 7, 2022, the Bureau of Industry and Security (BIS) 
released the interim final rule (IFR) ``Implementation of Additional 
Export Controls: Certain Advanced Computing and Semiconductor 
Manufacturing Items; Supercomputer and Semiconductor End Use'' (October 
7 IFR), which amended the Export Administration Regulations (EAR) to 
implement controls on advanced computing integrated circuits (ICs), 
computer commodities that contain such ICs, and certain semiconductor 
manufacturing items. The October 7 IFR also made other EAR changes to 
ensure appropriate related controls, including on certain ``U.S. 
person'' activities. This IFR addresses comments received in response 
to only the part of the October 7 IFR that controls semiconductor 
manufacturing equipment (SME) and amends the EAR to implement SME 
controls more effectively and to address ongoing national security 
concerns.

DATES: 
    Effective dates: This rule is effective November 17, 2023, except 
for amendatory instruction 5, which is effective January 1, 2026.
    Comment due date: Comments must be received by BIS no later than 
December 18, 2023.

ADDRESSES: Comments on this rule may be submitted to the Federal 
rulemaking portal (www.regulations.gov). The regulations.gov ID for 
this rule is: BIS-2023-0016. Please refer to RIN 0694-AJ23 in all 
comments.
    All filers using the portal should use the name of the person or 
entity submitting the comments as the name of their files, in 
accordance with the instructions below. Anyone submitting business 
confidential information should clearly identify the business 
confidential portion at the time of submission, file a statement 
justifying nondisclosure and referring to the specific legal authority 
claimed, and provide a non-confidential version of the submission.
    For comments submitted electronically containing business 
confidential information, the file name of the business confidential 
version should begin with the characters ``BC.'' Any page containing 
business confidential information must be clearly marked ``BUSINESS 
CONFIDENTIAL'' on the top of that page. The corresponding non-
confidential version of those comments must be clearly marked 
``PUBLIC.'' The file name of the non-confidential version should begin 
with the character ``P.'' Any submissions with file names that do not 
begin with either a ``BC'' or a ``P'' will be assumed to be public and 
will be made publicly available through https://www.regulations.gov. 
Commenters submitting business confidential information are encouraged 
to scan a hard copy of the non-confidential version to create an image 
of the file, rather than submitting a digital copy with redactions 
applied, to avoid inadvertent redaction errors which could enable the 
public to read business confidential information.

FOR FURTHER INFORMATION CONTACT: 
     For general questions, contact Regulatory Policy Division, 
Office of Exporter Services, Bureau of Industry and Security, U.S. 
Department of Commerce at 202-482-2440 or by email: [email protected], 
please include ``RIN: 0694-AJ23'' in the subject line.
     For technical questions, contact Carlos Monroy at 202-482-
3246 or [email protected].

SUPPLEMENTARY INFORMATION: 

Background

A. Introduction

    On October 7, 2022, BIS released interim final rule (IFR) 
``Implementation of Additional Export Controls: Certain Advanced 
Computing and Semiconductor Manufacturing Items; Supercomputer and 
Semiconductor End Use'' (October 7 IFR) and requested public comments 
on the newly imposed measures. (87 FR 62186, October 13, 2022) BIS 
imposed these new controls to protect U.S. national security interests 
by restricting the People's Republic of China (China's) military 
modernization efforts and degrading its ability to violate human 
rights. With a calibrated and measured approach, focused on key, force-
multiplying technologies, the October 7 IFR accomplished U.S. national 
security objectives while interfering with commercial trade no more 
than necessary to accomplish those objectives.
    The advanced computing integrated circuits (ICs), semiconductor 
manufacturing equipment (SME) essential to producing advanced-node ICs, 
and items used to further supercomputing capacity controlled through 
the October 7 IFR are critical for the development of weapons of mass 
destruction (WMD), advanced weapons systems, exascale supercomputing, 
and artificial intelligence (AI) capabilities, as well as high-tech 
surveillance applications. The use of such items in development and 
deployment of advanced weapons systems and advanced AI to support 
military applications would further U.S. military adversaries' goals of 
surpassing the United States and its allies in military capability, 
thereby destabilizing regional and global security status quos. This 
includes logic integrated circuits needed for future advanced weapon 
systems and memory needed for high volume and high-performance data 
storage in such systems. Additionally, AI capabilities, facilitated by 
supercomputing and built on advanced-node ICs made by SME, lead to 
improved speed and accuracy of military decision-making, planning, and 
logistics. They can also be used for cognitive electronic warfare, 
radar, signals, intelligence, and jamming. These ongoing national 
security concerns motivated the October 7 IFR and require the controls 
set forth in this SME IFR.
    The October 7 IFR imposed controls on two sets of items and 
activities. First, the rule established new Export Control 
Classification Numbers (ECCNs) and controls for certain advanced 
computing ICs and computer commodities that contain such ICs, as well 
as end-use and end-user controls related to ``supercomputers.'' Second, 
it established a new ECCN and controls for certain SME essential to 
producing advanced-node ICs, end-use controls related to the 
``development'' and ``production'' of those advanced ICs, and end-use 
controls related to the ``development'' and ``production'' of SME. BIS 
later imposed the same controls implemented on China in the October 7 
IFR to Macau because of Macau's position as a Special Administrative 
Region of China and the potential risk of diversion of items subject to 
the EAR from Macau to China. See ``Implementation of Additional Export 
Controls: Certain Advanced Computing and Semiconductor Manufacturing 
Items; Supercomputer and Semiconductor End Use Updates to the Controls 
to Add Macau'' (88 FR 2821, January 18, 2023).

[[Page 73425]]

    In this rule, BIS updates the SME controls through publication of 
this SME IFR while publishing elsewhere in this issue of the Federal 
Register a separate IFR, ``Implementation of Additional Export 
Controls: Certain Advanced Computing Items; Supercomputer and 
Semiconductor End Use; Updates to the Controls and Corrections'' (AC/S 
IFR). Together, these IFRs advance the U.S. national security 
objectives identified above and discussed more extensively in the 
chapeau of section C of this rule.
    This SME IFR amends the EAR by refining the scope of the October 7 
IFR to more effectively achieve national security objectives while 
responding to public comments about the semiconductor manufacturing and 
SME controls adopted in the October 7 IFR. This SME IFR: (1) includes 
additional types of SME to those previously described under ECCN 3B090 
and controls all such items under ECCNs 3B001 and 3B002; (2) revises 
ECCNs 3D001, 3D002, 3D003, and 3E001 to make conforming changes for the 
license requirements for the items moved from ECCN 3B090 to ECCNs 3B001 
and 3B002; (3) revises the license exception restrictions to reflect 
the removal of 3B090 and makes other changes related to the 
availability of license exceptions for these SME items; (4) revises the 
national security license requirements and review policy to impose 
national security controls on newly added SME and those items moved 
from ECCN 3B090 to ECCNs 3B001 and 3B002 for Macau and destinations 
specified in Country Group D:5; (5) revises the regional stability 
license requirements and license review policy to, among other things, 
remove references to ECCN 3B090 and expand the license requirement to 
Macau and destinations specified in Country Group D:5; (6) revises the 
de minimis provisions to add a 0% de minimis rule for items described 
in new ECCN 3B001.f.1.b.2.b; (7) revises and reformats the ``U.S. 
persons'' activities controls and ``supercomputer'' and semiconductor 
manufacturing end-use controls to better achieve the objectives of the 
October 7 IFR and improve clarity; (8) adds two new defined terms to 
the EAR for ``extreme ultraviolet'' (``EUV'') and ``advanced-node 
integrated circuits;'' (9) adds a new Temporary General License (TGL) 
to provide SME producers in the United States and Country Groups A:5 
and A:6 countries additional time to identify alternative sources of 
supply outside of arms-embargoed countries, or to acquire individually 
validated licenses; and (10) revises license requirements based on 
destination.

B. Public Comments and BIS's Responses

    BIS received 43 responsive public comments in response to the 
October 7 IFR. This rule summarizes and addresses the comments under 63 
topics that were specific to controls related to SMEs and the 
production of advanced-node ICs. The AC/S IFR, published elsewhere in 
this issue of the Federal Register, summarizes and addresses comments 
on the advanced computing provisions of the October 7 IFR, as well as 
general comments applicable to all aspects of the October 7 IFR that 
are not otherwise addressed in this SME IFR. BIS appreciates the many 
public comments it received and encourages continued engagement and 
feedback. This SME rule is published as an IFR with a 60-day comment 
period and 30-day delayed effective date for most changes for the 
purpose of gathering valuable public input.

Breadth of the October 7 IFR and Its Unilateral Imposition

    Topic 1: Many commenters expressed concern and surprise about the 
breadth of the October 7 IFR, in some cases arguing that existing 
multilateral (i.e., the Wassenaar Arrangement) controls were sufficient 
to address BIS's stated objectives.
    BIS Response: BIS understands the importance of predictability and 
specific focus in export controls, particularly given the complexity 
and interdependence of the global semiconductor industry. The U.S. 
Government has frequently and consistently raised its concerns about 
China's military modernization, particularly in light of China's 
Military-Civil Fusion (MCF) strategy, which deliberately blurs the 
lines between commercial sectors and military programs, and the ability 
of China's government to demand information and assistance from 
companies. The U.S. Government, including BIS, has been clear that MCF, 
combined with China's government system, has led to additional U.S. 
export controls on items including emerging technologies that have 
military applications. Consistent with this view, BIS has specifically 
signaled intent during speeches at BIS's 2022 Annual Update Conference 
and various other public engagements to pursue additional controls in 
this area to address U.S. national security and foreign policy 
concerns, including with respect to military modernization and human 
rights.
    Moreover, while some may argue against the breadth of the October 7 
IFR controls, in fact BIS sought to use a scalpel approach, seeking to 
restrict China's military modernization efforts through the narrowest 
possible restrictions of sensitive technologies without unduly 
interfering with commercial trade. While items that are the subject of 
this SME IFR are not yet formally controlled under a multilateral 
regime, the urgency and criticality of the U.S. national security 
concerns described herein dictate control pending adoption through the 
Wassenaar Arrangement.
    Topic 2: Many commenters expressed concern about the unilateral 
nature of new controls in the October 7 IFR. These commenters 
highlighted the established congressional preference for multilateral 
controls set forth in the Export Control Reform Act of 2018 (ECRA), 
urging that BIS should not have acted, and should not act in the 
future, without first securing multilateral support for any new 
controls, particularly those related to SME and semiconductor 
production because foreign available items not subject to U.S. control 
may undercut the effectiveness of U.S. action. For example, a commenter 
noted that, in function, new ECCN 3B090 on SME expands existing 3B001 
by adding new parameters controlled only to China. Before becoming 
effective, Wassenaar Arrangement approval of a U.S. proposal should be 
obtained.
    BIS response: BIS continues to work with interagency partners to 
obtain formal multilateral regime agreement for all new controls, 
including those imposed in this IFR, consistent with ECRA. There are 
circumstances, however, consistent with ECRA, in which action pending 
formal multilateral regime agreement is warranted to protect U.S. 
national security interests. BIS's imposition of National Security (NS) 
controls on the items in this SME IFR is consistent with these 
principles. These controls are being implemented in anticipation of 
formal multilateral regime adoption.
    Topic 3: Many commenters agreed with BIS's objectives but argued 
that the unilateral controls in the October 7 IFR have already been, 
and will be, both damaging and ineffective particularly because they 
encourage foreign companies to ``design out'' or avoid products subject 
to the EAR. This ``design out'' is to the short- and long-term 
detriment of U.S.-based companies and their technological leadership 
within the semiconductor industry. Accordingly, commenters argue the

[[Page 73426]]

controls are, or over time will become, ineffective.
    BIS response: BIS's goal is to implement effective and focused 
controls that do not diminish U.S. technology leadership. To this end, 
BIS's revisions in this SME IFR focus controls on specific capabilities 
related to military advancement and activities or technologies that 
enable those capabilities. At the same time, BIS has refined controls 
to minimize negative consequences including by encouraging replacement 
of items subject to the EAR with items not subject to the EAR. Among 
other things, BIS has adopted more nuanced license review policies that 
account for end use and the replaceability of items subject to control 
and made available new general authorizations to allied-destination 
companies to facilitate their transition to the new controls. These 
steps recognize China's role in the global semiconductor industry and 
electronics ecosystem. BIS's focus is on the development and production 
of advanced-node ICs, given their national security implications and 
China's well-documented MCF policy. Finally, BIS understands and 
appreciates the significant efforts by global industry to comply with 
new export controls. Corporate compliance activities are the keystone 
of effective controls, and BIS reiterates its interest in feedback from 
the export community. BIS also notes that, when warranted, we will 
consider requests for expedited review or other forms of authorization, 
as it did in the days, weeks, and months following the October 7 IFR.
    Topic 4: A commenter noted that allies have not imposed similar 
semiconductor end-use controls on their nationals. This commenter noted 
that although the Enhanced Proliferation Control Initiative (EPCI) is a 
decades-old initiative that was the basis for U.S. and allied partner 
export control authorities to impose licensing obligations for the 
provision of services and exports involving otherwise uncontrolled 
items, no ally has similarly informed its citizens that support for 
advanced-node IC development or production in China could per se 
support the development or production of WMD.
    BIS response: BIS has revised the ``U.S. persons'' controls related 
to SME set forth in Sec.  744.6 to ensure that EPCI controls are 
calibrated to address the national security concerns described above 
without unduly undermining the ability of U.S. persons to work for 
companies headquartered in the United States and closely allied 
countries. Additional discussion on the changes made to U.S. person 
controls are discussed in section C.10 of this rule.
    Topic 5: A commenter requested that BIS should consider the impact 
on potential public benefits derived from advanced technologies 
developed through cross-border cooperation, especially in the realm of 
global health and environmental issues.
    BIS response: BIS has considered this impact and notes that 
existing licensing policies are designed to be flexible, enabling 
authorization of certain types of collaboration when warranted, such as 
to maintain supply chains, assuming the risks of diversion to 
prohibited end uses are sufficiently mitigated.
    Topic 6: A commenter noted that the United States will be hurt by 
not having access to technology developed in China and the United 
States may be left behind in the technology race because it will be 
harder to share information needed for technological development.
    BIS response: The EAR controls do not restrict the importation of 
items from China. However, BIS understands that this commenter likely 
means that because U.S. companies will be restricted in the types of 
items they will be able to export, reexport, or transfer to or within 
China or Macau and the types of end uses or end users they can engage 
with in China or Macau, it may be more difficult to collaborate with 
parties in China and Macau. BIS does not seek to disrupt existing 
supply chains through this rulemaking. These controls are necessary to 
protect national security and have been tailored in as focused a way as 
possible to affect this result.
    Topic 7: A commenter noted that when some People's Republic of 
China (PRC) semiconductor foundries buy semiconductor manufacturing 
equipment, they may (without BIS authorization) resell part or the 
entire semiconductor production line to an entity that makes military 
products. The commenter expressed doubt that the U.S. Government would 
be able to control how the semiconductor equipment will be used after 
it is shipped to China. It is vital that much stricter controls be 
implemented.
    BIS response: BIS acknowledges that transfers within China or Macau 
are a concern, but the existing EAR requirements, including the 
controls imposed in the October 7 IFR, conditions on BIS licenses, and 
the license requirement imposed by Sec. Sec.  744.21 and 744.22 for 
such transfers (in-country), already impose an authorization 
requirement for these types of transfers. In addition, equipment 
exporters typically have staff on-site to assist in operating the 
semiconductor manufacturing equipment. Further, PRC Import Certificates 
are required for certain licenses, which facilitates U.S. Government 
oversight in identifying diversion. BIS is continually assessing how 
these efforts can be strengthened to address this issue of concern.

ECCN 3B090

    BIS summarizes below the comments received on ECCN 3B090 and 
highlights how these comments are addressed in the new controls added 
in this SME IFR in ECCNs 3B001 and 3B002. Additional discussion of the 
specific revisions made to ECCNs 3B001 and 3B002 can be found in 
sections C.1 and C.2 of this rule, respectively. The removal of ECCN 
3B090 is discussed in section C.3, and revisions to ECCNs 3D001 and 
3E001 are discussed in section C.4.
    Topic 8: BIS received various comments on the addition of ECCN 
3B090. Some commenters raised concerns over certain commodities that 
fell under ECCN 3B090 if they believed that there is foreign 
availability of the same technology. Several commenters highlighted 
areas in which they thought additional clarifications or changes were 
needed to the 3B090 control parameters.
    BIS response: As a general matter, BIS believes that the revisions 
made to the Commerce Control List (CCL) in this SME IFR respond to the 
concerns raised in response to the October 7 IFR for CCL-based controls 
for semiconductor manufacturing items. This SME IFR removes ECCN 3B090 
and makes conforming changes to ECCNs 3B001, 3B002, 3D001, and 3E001, 
as BIS determined that use of existing ECCNs would facilitate global 
compliance and enforcement. Because of the removal of ECCN 3B090 and 
the other changes in the SME CCL-based controls implemented, the 
comments submitted in response to the October 7 IFR on ECCN 3B090 and 
related software and technology under ECCNs 3D001 and 3E001 are 
generally no longer applicable. BIS encourages these commenters to 
review the SME IFR revisions to the CCL, along with the conforming 
changes made to other parts of the EAR and submit any additional 
comments that may be warranted. BIS also encourages public comment on 
any changes in foreign availability since the October 7 IFR.
    Topic 9: A commenter noted that ECCN 3B090.a.1 under-controls the 
types of equipment at issue and could be available from non-U.S. 
manufacturers. This commenter also requested BIS add the words ``or 
electroless'' after ``electroplating'' to ECCN 3B090.a.1. This 
commenter noted that the control does not refer to

[[Page 73427]]

``electroless'' plating, which is an alternative means to enable the 
selective cobalt process described in ECCN 3B090.a.5. In other words, 
equipment for depositing an alloy of cobalt through electroless plating 
is also equipment that is specific to the production of semiconductors 
at 14 nm nodes or smaller.
    BIS response: This SME IFR removes ECCN 3B090.a.1 and adds these 
items to the new ECCN 3B001.d.1. BIS accepts this commenter's 
recommendation. BIS has also added a note to ECCN 3B001.d.1 to clarify 
that this control applies to semiconductor wafer processing equipment, 
but not necessarily other equipment that may nevertheless be designed 
for cobalt electroplating or cobalt electroless-plating deposition.
    Topic 10: A commenter noted that ECCN 3B090.a.2 applies to tools 
available outside the United States used to produce mature node 
semiconductors. This commenter requested BIS remove the words ``or 
tungsten'' in ECCN 3B090.a.2 or, in the alternative, remove ECCN 
3B090.a.2 completely because ECCN 3B090.a.8 covers the same scope of 
equipment. ECCN 3B090.a.2 controls ``chemical vapor deposition 
equipment capable of deposition of cobalt or tungsten fill metal having 
a void/seam having a largest dimension less than or equal to 3 nm in 
the fill metal using a bottom-up fill process.'' The inclusion of the 
words ``or tungsten'' in this control appears to be a mistake because 
equipment capable of chemical vapor deposition of tungsten has been in 
use for producing semiconductors at the 90nm and larger technology 
nodes for more than two decades. To fix this apparent error, the words 
``or tungsten'' could be removed. Another option would be to remove 
ECCN 3B090.a.2 because the equipment described in the paragraph are all 
already within the scope of the tools described in ECCN 3B090.a.8, 
which describes the equipment for cobalt fill.
    BIS response: BIS has removed ECCN 3B090.a.2 and adds related items 
to ECCN 3B001.d.2. BIS has also revised the scope of the control to 
provide greater specificity on the types of tungsten-based capabilities 
subject to control. The new ECCN 3B001.d.2 also includes the phrase 
``Equipment designed for'' at the beginning of ECCN 3B001.d.2 and 
removes the phrase ``capable of'' and adds in its place the phrase ``by 
performing'' in ECCN 3B001.d.2.a to make the control parameter more 
precise. BIS encourages commenters that submitted comments on ECCN 
3B090 to submit any additional comments they consider relevant.
    Topic 11: A commenter noted that ECCN 3B090.a.6 applies to tools 
available outside the United States used to produce mature node 
semiconductors. This commenter requested BIS remove ECCN 3B090.a.6 
because it is not limited to the production of advanced-node ICs and 
ECCN 3B090.a.8 already controls the types of equipment apparently 
intended to be controlled by the ECCN. ECCN 3B090.a.6. controls 
``physical vapor deposition equipment capable of depositing a cobalt 
layer with a thickness of 10 nm or less on a top surface of a copper or 
cobalt metal interconnect.'' BIS apparently inadvertently worded the 
control in such a way that it is not limited to equipment specific to 
the production of advanced-node ICs. That is, the control text is not 
limited in scope to the production of cobalt interconnects on 
semiconductors at the 14 nm or smaller technology nodes. Rather, it 
applies equally to equipment that is widely used to produce mature node 
ICs (e.g., at the 65 nm technology node) that have been in production 
for more than a decade.
    BIS response: This SME IFR removes ECCN 3B090.a.6 and, unlike other 
ECCN 3B090 controls, does not re-establish a similar control under ECCN 
3B001.d. The objective of former ECCN 3B090 was to focus controls on 
items used in the production of advanced-node ICs. Based on feedback 
from industry, including from this commenter, BIS agrees that ECCN 
3B090.a.6 did not effectively tailor the scope of control to this 
objective, and as a result BIS has decided not to re-establish this 
control at this time.
    Topic 12: A commenter requested BIS remove ECCN 3B090.a.7 and add 
alternative text, which would be clearer and better achieve the 
intended objectives of the October 7 IFR.
    BIS response: This IFR removes ECCN 3B090.a.7 and adds controls on 
these commodities to ECCN 3B001.d.12. BIS has not adopted this 
commenter's recommendations but continues to study the controls to 
ensure appropriate coverage. BIS encourages commenters that submitted 
comments on ECCN 3B090 to submit any additional comments they consider 
relevant.
    Topic 13: A commenter noted that ECCN 3B090.a.11 applies to tools 
available outside the United States used to produce mature node 
semiconductors. This commenter requested BIS revise slightly ECCN 
3B090.a.11 so that it is limited in scope to equipment specific to 
producing advanced-node ICs. Although BIS apparently intended this 
control to only apply to equipment specific to producing advanced-node 
ICs, the commenter believes the control is worded in such a way that it 
also applies to tools that have been used for more than a decade to 
produce mature node ICs. Instead, the language would need to be 
slightly revised so that it is focused only on the atomic layer 
deposited fill process.
    BIS response: This SME IFR removes ECCN 3B090.a.11 and adds new 
controls on these commodities to ECCN 3B001.d.11. BIS has not adopted 
this commenter's recommendations but continues to study the controls to 
ensure appropriate coverage. BIS encourages commenters that submitted 
comments on ECCN 3B090 to submit any additional comments they consider 
relevant.

SME End-Use Control Under Sec.  744.23(a)(4) (Former Sec.  
744.23(a)(1)(v) and (a)(2)(v))

    The following is a summary of public comments regarding Sec.  
744.23 and BIS's responses thereto. Additional discussion about Sec.  
744.23 can be found in section C.11 of this rule.
    Topic 14: Many commenters argued that the end-use control set out 
in Sec.  744.23(a)(2)(v) of the October 7 IFR (and now in Sec.  
744.23(a)(4)) is too broad, expressing concern about unintended 
consequences for the ``development'' and ``production'' of legacy ICs.
    BIS response: BIS agrees that this provision is overbroad and has 
narrowed the product scope to any item subject to the EAR and specified 
on the CCL. Allowing continued development and production of indigenous 
SME in China would erode the effectiveness of the end-use controls in 
Sec.  744.23(a)(2). However, BIS believes that this narrowed scope will 
capture the parts, components, and accessories for SME that are of 
greatest concern.
    Topic 15: Several commenters expressed concern that the end-use 
control set out in Sec.  744.23(a)(2)(v) of the October 7 IFR (and now 
in Sec.  744.23(a)(4)) goes far beyond the advanced production 
objectives of the October 7 IFR by prohibiting exports of even EAR99 
designated items to China for basic semiconductor development and 
production applications. These commenters warned against cutting off 
U.S.-based producers of EAR99 items from large segments of the global 
semiconductor supply chain or risking the loss of long-held supply 
positions to non-U.S. and producers of raw materials from China.

[[Page 73428]]

    BIS response: Neither the October 7 IFR nor this SME IFR cut off 
U.S.-based suppliers of EAR99 items from the global semiconductor 
supply chain, and BIS disagrees with these commenters' characterization 
of the scope of these end-use controls. BIS notes that it has narrowed 
the ``Product Scope'' specified in Sec.  744.23(a)(4) to items subject 
to the EAR specified on the CCL, and the ``End-Use Scope'' is now 
narrowed to the ``development'' or ``production'' of certain CCL-
listed, Category 3 front-end SME in either Macau or a destination 
specified in Country Group D:5. This said, the end-use control under 
Sec.  744.23(a)(4) is not related to the ``development'' or 
``production'' of ICs or other semiconductor items. Further, there is 
no general end-use control on the export, reexport, or transfer (in-
country) of EAR99 items to China or Macau when destined only for use in 
the ``development'' or ``production'' of non-``advanced-node ICs,'' 
absent other prohibited end uses or end users.
    Topic 16: A commenter noted that including ECCN 3B991 significantly 
broadens the scope of Sec.  744.23(a)(4) (former Sec.  744.23(a)(2)(v)) 
beyond items only used for semiconductors. This commenter requests BIS 
to provide clarity as to why the rule should restrict exports of 
``parts,'' ``components,'' or ``equipment'' for the development or 
production of these types of equipment that are not related to 
semiconductor device manufacturing.
    BIS response: BIS disagrees with this commenter's characterization 
of the controls. Specifically, BIS is not aware of items in ECCN 3B991 
that are unrelated to semiconductor device manufacturing. However, BIS 
welcomes additional comments identifying specific Category 3, Group B 
ECCNs that are unrelated to semiconductor device manufacturing, and 
which may warrant consideration for exclusion from Sec.  744.23(a)(4). 
Also, BIS clarifies in this rule that the product scope of Sec.  
744.23(a)(4) covers any items subject to the EAR specified on the CCL 
(not just ``parts,'' ``components,'' or ``equipment'') when destined 
for use in the ``development'' or ``production'' of SME specified in 
the listed ECCNs under Sec.  744.23(a)(4).
    Topic 17: A commenter noted that controlling EAR99 materials for 
use in China's semiconductor industry unnecessarily harms early stages 
of semiconductor supply chains that feed a wide range of commercial 
applications. This commenter believes that former Sec.  744.23(a)(1)(v) 
and (a)(2)(v) do not distinguish between suppliers at different stages 
of the semiconductor supply chain and treats basic material suppliers 
equally to advanced IC suppliers, subjecting all to an effective ban on 
exports to China when for use in Group 3B ECCN equipment.
    BIS response: BIS disagrees with the commenter's characterization 
of these controls. The end-use control under Sec.  744.23(a)(4) (former 
Sec.  744.23(a)(2)(v)) does not capture items that are merely ``used'' 
by Group 3B ECCN items, but rather only items used in the 
``development'' or ``production'' of specified Group 3B ECCN items. For 
example, Sec.  744.23(a)(4) would not control the shipment of CCL items 
to be used in or consumed by `front-end integrated circuit 
``production'' equipment' specified in a Group 3B ECCN in an IC 
production setting, assuming the equipment is not involved in the 
``development'' or ``production'' of ``advanced-node integrated 
circuits,'' as that term is now defined in Sec.  772.1. Similarly, 
these sections do not prohibit providing spare parts or materials for 
3B ECCN items (again, assuming the 3B items are already ``developed'' 
or ``produced''). In addition, this rule eases the compliance burden 
associated with license requirements arising from Sec.  744.23(a)(4) 
controls by providing a TGL in supplement no. 1 to part 736 for 
entities headquartered in the United States or in a destination 
specified in Country Group A:5 or A:6 that are not majority-owned by an 
entity headquartered in either Macau or a destination specified in 
Country Group D:5.
    Topic 18: A commenter noted that controls are catching items that 
are purely used for civil applications. This commenter noted that 
initial processing steps for basic silicon wafers can involve 
semiconductor production equipment and processes employed for solely 
commercial applications, such as photovoltaic cells and battery 
technologies.
    BIS response: BIS disagrees with this commenter's characterization 
of the controls. Section 744.23(a)(2) only controls items destined for 
the ``development'' or ``production'' of ICs. The controls do not 
generally capture the ``development'' or ``production'' of photovoltaic 
cells or battery technologies simply because such activity involves 
semiconductor production equipment. If the commenter is referring to 
the ``development'' or ``production'' of basic silicon wafers or ICs 
(other than ``advanced-node ICs''), including those that are 
subsequently used in these types of commercial applications (and not 
any of the end uses described in Sec.  744.23), these items similarly 
fall outside the scope of Sec.  744.23. If BIS has misunderstood the 
commenter's characterization, additional comments may be submitted in 
response to this SME IFR or guidance may be sought directly from BIS, 
including in the form of an Advisory Opinion request to BIS pursuant to 
Sec.  748.3(c) for clarification.
    Topic 19: A commenter noted that the semiconductor end-use control 
in Sec.  744.23(a)(4) (former Sec.  744.23(a)(2)(v)) could potentially 
apply to shipments of U.S.-origin EAR99-designated raw materials to 
non-U.S. fabricators of parts for Group 3B ECCN equipment, if the non-
U.S. fabricator intends to export at least one of its products, which 
are not otherwise subject to the EAR, to China. The commenter 
recommends BIS address these circumstances in its revision to the 
October 7 IFR or in BIS published guidance.
    BIS response: This rule narrows the product scope of Sec.  
744.23(a)(4) (former Sec.  744.23(a)(2)(v)) to items subject to the EAR 
and specified on the CCL. Authorization would be required if there is 
``knowledge'' at the time of export, reexport, or transfer (in-country) 
that an item on the CCL will ultimately be used (including by 
incorporation into another item such as a ``part'' or ``component'') in 
the ``development'' or ``production'' of specified Group 3B ECCN 
equipment in Macau or a destination specified in Country Group D:5. 
This commenter should also review BIS's responses to Topics 42 through 
45, below, for additional guidance on the scope of Sec.  744.23(a)(4). 
Consistent with its response to Topic 43, BIS notes that an export, 
reexport, or transfer (in-country) of a replacement ``part'' or 
``component'' destined for incorporation into Group 3B equipment in 
Macau or a destination specified in Country Group D:5 that is already 
``developed'' and ``produced'' (e.g., finished equipment that is 
already in operation in an integrated circuit production facility) 
would not fall within the scope of Sec.  744.23(a)(4) and would need to 
be analyzed separately under other end-use controls, particularly Sec.  
744.23(a)(2).
    Topic 20: A commenter requested that BIS limit the scope of Sec.  
744.23(a)(4) (former Sec.  744.23(a)(2)(v)) by exempting (1) legacy SME 
and SME components, (2) exports to companies located in China but 
headquartered in the United States and allied partners, and (3) exports 
of items to China intended for incorporation into SME or SME components 
that will be utilized outside of China.
    BIS response: In this rule, BIS has added a TGL in paragraph (d)(1) 
of supplement no. 1 to part 736, which permits companies headquartered 
in the United States or in Country Group A:5

[[Page 73429]]

or A:6 countries to continue to use suppliers in China and other 
destinations in Country Group D:5 and Macau, subject to certain 
conditions. BIS believes this TGL will mitigate or resolve the concerns 
raised by this commenter. See the discussion in section C.6 of this 
rule for additional information about this TGL.
    Topic 21: A commenter noted that the SME restrictions under Sec.  
744.23(a)(4) (former Sec.  744.23(a)(2)(v)) will create a strong 
incentive for companies operating in China, including those 
headquartered in the United States and allied partners, to replace 
U.S.-origin items with non-U.S. alternatives. When U.S.-origin 
components cannot be designed out, it will create a major incentive for 
companies to move their supply chains out of China even when U.S. and 
allied companies are the economic beneficiaries of these supply chains.
    BIS response: BIS has established a new TGL in in paragraph (d)(1) 
of supplement no. 1 to part 736 to permit the activities described by 
this commenter and mitigate the commenter's concerns. Separately, BIS 
agrees with the commenter's suggestion that difficulty procuring 
certain U.S.-origin items may incentivize companies to move supply 
chains out of China. Separate from release of the October 7 IFR, 
companies are also analyzing the risks of continued operation in China 
related to economic coercion and intellectual property theft, among 
other concerns.
    Topic 22: A commenter noted that given lower production costs in 
China, without modification, the SME restriction under Sec.  
744.23(a)(4) (former Sec.  744.23(a)(2)(v)) will result in greater 
fabrication costs for ``Western'' semiconductor equipment manufacturers 
and the entire electronics sector in the United States. These costs do 
not appear to be balanced by a substantial strategic benefit.
    BIS response: The national security imperative for the October 7 
IFR and this subsequent rulemaking is explained in section C and, with 
respect to the ``development'' and ``production'' of indigenous SME, 
immediately below in response to Topic 23. BIS's effort to regulate 
only the most advanced and important technologies with these rules 
reflects a focus on national security without interfering with 
commercial trade any more than necessary to accomplish national 
security objectives.
    Topic 23: Several commenters requested that BIS publish a list of 
fabs of concern. These commenters noted that to reduce uncertainty 
around what facilities fall under the scope of the October 7 IFR, BIS 
should consider publishing a list of fabs manufacturing advanced nodes 
covered by the October 7 IFR. These comments noted that BIS should 
publish an affirmative list of ``semiconductor fabrication facilities'' 
that engage in covered ``development'' or ``production'' of NOT AND 
(NAND), logic, or dynamic random-access memory (DRAM) integrated 
circuits. These commenters noted that the Entity List should be used 
instead of relying on Sec.  744.23 or Sec.  744.6. Several commenters 
noted that untold hours of due diligence efforts by companies could be 
eliminated if BIS would simply identify the covered entities. These 
commenters also noted that the due diligence conclusions reached by one 
exporter may be different from another, even for the same PRC end user, 
leading to an unlevel playing field.
    BIS response: BIS is aware of, and generally shares, industry's 
preference that BIS use the Entity List where possible in lieu of end-
use controls under Sec.  744.23 or ``U.S. person'' controls under Sec.  
744.6. BIS reflected this approach in the October 7 IFR by identifying 
28 entities involved in the use of advanced computing items or 
supercomputers and intends to add additional entities to the Entity 
List as they are identified and approved by the End-User Review 
Committee (ERC). The use of the Entity List for this purpose will, like 
the Military End-User (MEU) List, be non-exhaustive, so exporters, 
reexporters, and transferors will still need to do their own due 
diligence when dealing with parties not identified on the Entity List 
with a footnote 4 designation. This SME IFR does not add any additional 
entities to the Entity List, but a separate Entity List rule that is on 
public inspection October 17, 2023, and publishing in the Federal 
Register of October 19, 2023, adds multiple entities that the ERC 
determined should be added to the Entity List. That rule, ``Entity List 
Additions,'' adds 13 entities to the Entity List for acquiring and 
attempting to acquire U.S.-origin items in support of China's military 
modernization. Specifically, these entities have developed large AI 
models and AI chips for defense purposes using U.S.-origin items. They 
are also given a footnote 4 designation, which means that items subject 
to the EAR, for the purpose of these license requirements, include 
foreign-produced items that are subject to the EAR pursuant to Sec.  
734.9(e)(2) of the EAR. As the ERC identifies and approves additional 
entities, those entities will be added to the Entity List on a timely 
basis.

Appropriate Scope of the SME Development and Production End-Use Control 
for Lower-Level Items

    Topic 24: A commenter requests that BIS remove ECCNs controlled 
only for Anti-Terrorism (AT) reasons, i.e., 3B991 and 3B992, from Sec.  
744.23(a)(4) (former Sec.  744.23(a)(2)(v)). The commenter noted that 
the removal of these AT-only ECCNs will prevent excessive and 
unnecessary use of unilateral controls and limit the impact of the 
October 7 IFR on legacy semiconductor manufacturing. The commenter 
noted that ECCNs 3B991 and 3B992 generally did not require a license to 
China prior to the October 7 IFR and have utility across the spectrum, 
including legacy manufacturing nodes.
    BIS response: BIS disagrees with the commenter's characterization 
of the scope of controls. ECCNs 3B991 and 3B992 remain uncontrolled to 
China generally, and Sec.  744.23 does not impose a license requirement 
for the export, reexport, or transfer (in-country) of a ECCN 3B991 or 
3B992 item to Macau or a destination specified in Country Group D:5 
unless the item is destined for one of the end uses specified in Sec.  
744.23(a)(1) through (4), such as the ``development'' or ``production'' 
of integrated circuits at a facility where ``production'' of 
``advanced-node integrated circuits'' occurs, or for ``development'' or 
``production'' of `front-end integrated circuit ``production'' 
equipment,' and ``components,'' ``assemblies,'' and ``accessories'' 
specified in ECCN 3B001 (except 3B001.g, .h, and .j), 3B002, 3B611, 
3B991 (except 3B991.b.2), or 3B992. If an exporter has ``knowledge'' 
that its 3B991 or 3B992 equipment will be used only at a facility that 
``produces'' ICs at a legacy technology node but not ``advanced-node 
ICs,'' Sec.  744.23(a)(2) does not apply. Furthermore, Sec.  
744.23(a)(4) does not restrict the export of ECCN 3B991 and 3B992 items 
destined for use in the production of ICs. Rather, it only restricts 
these items (among all other items subject to the EAR and specified on 
the CCL) destined for use in the ``development'' or ``production'' of 
other SME (or ``parts'' or ``components'' therefor), which if 
indigenized would erode the effectiveness of BIS's end-use and list-
based controls.
    Topic 25: A commenter noted that it is very unlikely restrictions 
on the development or production of ECCN 3B991 and 3B992 items would 
ever be adopted by our allies and that these commodities and items used 
in their development and production are already widely available in 
China,

[[Page 73430]]

which means even if other countries were to add these controls on 
exports to China, the controls would still be ineffective.
    BIS response: Consistent with ECRA, BIS prioritizes engagement with 
relevant governments to achieve multilateral coordination of controls, 
including through the Wassenaar Arrangement.
    Topic 26: A commenter requests that the SME restriction under Sec.  
744.23(a)(4) (former Sec.  744.23(a)(2)(v)) should not apply to the 
production of legacy SME or SME components. This commenter notes that 
the production of SME and SME components used for the manufacture of 
legacy semiconductors devices, which can generally be sent to China 
without a license under current multilateral and U.S. export controls 
(notwithstanding the October 7 IFR), can be permitted in China without 
affecting the ability of the United States to restrict advanced-node IC 
manufacturing in China.
    BIS response: BIS believes that restricting the indigenization of 
`front-end integrated circuit ``production'' equipment,' and items on 
the CCL therefor, is critical for the effectiveness of the end-use 
controls in Sec.  744.23(a)(2). BIS welcomes additional comments on the 
scope of Sec.  744.23(a)(4), including the identification of specific 
SME items (and related ECCNs) that are exclusively used in the 
manufacture of legacy-node ICs.
    Topic 27: A commenter asked for clarification whether BIS intended 
to include the development or production in China of masks, reticles, 
and mask substrates within the scope of Sec.  744.23(a)(4) (former 
Sec.  744.23(a)(2)(v)). This commenter notes that the policy purpose of 
the rule appears to be focused on limiting the development and 
production in China of semiconductor production equipment, such as 
etch, deposition, inspection, and lithography tools. ECCNs 3B001.g, 
3B001.h, 3B001.j, and 3B991.b.2, however, refer to various types of 
masks, reticles, and mask substrate blanks. This commenter notes that 
while these items are essential in the fabrication of semiconductors, 
these are not production ``equipment'' in the traditional sense of the 
word as they are developed in a process that immediately precedes the 
front-end integrated circuit fabrication process. If BIS did not intend 
to affect exports for use in producing masks, reticles, or mask 
substrates, this commenter asks that BIS amend the provision to exclude 
them from its scope.
    BIS response: BIS agrees and has excluded masks and related items 
from the end-use scope of Sec.  744.23(a)(4). However, BIS notes that 
end-use control Sec.  744.23(a)(2) could still capture a mask, reticle, 
or mask substrate excluded from Sec.  744.23(a)(4) if it is subject to 
the EAR and destined for use in the ``development'' or ``production'' 
of ICs at a facility that ``produces'' ``advanced-node integrated 
circuits'' (or if the technology node of the ICs is unknown) in China 
or Macau.
    Topic 28: A commenter noted that photomasks are not ``parts,'' 
``components,'' or ``equipment,'' so they are outside the scope of 
Sec.  744.23(a)(4) (former Sec.  744.23(a)(2)(v)). This commenter seeks 
BIS's confirmation that no license would be required for exports, 
reexports, or transfers (in-country) of items subject to the EAR that 
are intended for use in photomask manufacturing in China because 
photomasks, even if specified in ECCN 3B001 or 3B991, are not captured 
within the end-use scope of Sec.  744.23(a)(4).
    BIS response: Under the EAR, a photo mask is ``equipment.'' ECCN 
3B991 controls ``[e]quipment not controlled by 3B001 for the 
manufacture of electronic ``parts,'' ``components,'' and materials (See 
List of Items Controlled), and ``specially designed'' ``parts,'' 
``components'' and ``accessories'' therefor.'' ECCN 3B991.b.2.a 
controls ``[f]inished masks.'' Nonetheless, BIS has excluded these 
items from the end-use scope of Sec.  744.23(a)(4) as masks are not 
used in the ``development'' or ``production'' of SME. See the response 
to Topic 27, above, for additional guidance on the treatment of masks, 
reticles, and mask substrates under Sec.  744.23(a)(4) and other end-
use controls.

Appropriate Scope of SME End-Use Controls for Back-End Testing 
Equipment

    Topic 29: A commenter requested that BIS exclude items that are 
exclusively for use in back-end activities, including ECCN 3A992.a or 
3B992.b.4, and EAR99 items, from Sec. Sec.  744.23(a)(1) and (2) 
(former Sec.  744.23(a)(1)(iii) and (iv), (a)(2)(iii) and (iv)) and 
744.6(c)(2). This commenter noted that these controls impose licensing 
obligations over the export, reexport, and transfer to or within China 
or Macau of their post-production test equipment, whether subject to 
the EAR or not, if they would be for use in the ``production'' of 
semiconductors ``at'' a covered facility. This commenter noted that 
this location-specific control makes no policy sense with respect to 
their post-production test equipment, because their products have no 
bearing on the key characteristics of advanced-node ICs described in 
the definition of ``advanced-node integrated circuit'' (former Sec.  
744.23(a)(1)(iii)(A), (B), or (C)).
    BIS response: BIS agrees. Consistent with BIS's October 7 IFR 
Frequently Asked Questions (FAQ) II.A.1, which may be found at https://www.bis.doc.gov/index.php/documents/product-guidance/3211-2023-1-25-updated-faqs-for-oct-7-advanced-computing-and-semiconductor-manufacturing-equipment-rule/file, posted on January 25, 2023, this SME 
IFR adds a new paragraph (a)(5) (Back-end exclusion) to Sec.  744.23 
and specifies under this paragraph that for purposes of Sec.  
744.23(a)(2), the term ``production'' does not apply to back-end steps, 
such as assembly, test, or packaging that do not alter the integrated 
circuit technology level. If there is a question at the time of export, 
reexport, or transfer (in-country) about whether a manufacturing stage 
is ``back-end'' or whether a back-end activity ``alter[s] the 
semiconductor technology level,'' you may submit an Advisory Opinion 
request to BIS pursuant to Sec.  748.3(c) for clarification.
    Topic 30: A commenter noted that semiconductor automated test 
equipment (ATE) should be considered ``use'' equipment rather than 
``production'' equipment. The commenter requested BIS confirm in its 
response to the comments that semiconductor ATE are, for purposes of 
the controls at issue in Sec. Sec.  734.9(e), 744.6(c)(2), and 744.23, 
``use'' equipment and not ``production'' equipment, as these terms are 
defined in the EAR. The commenter noted that the EAR define ``use'' as 
meaning the ``operation, installation (including on-site installation), 
maintenance (checking), repair, overhaul, and refurbishing.'' This 
commenter's ATE is used to check already-produced items and is not part 
of the semiconductor production process that is the policy concern that 
BIS is seeking to address in implementing the controls in Sec.  
734.9(e), Sec.  744.6(c)(2), or Sec.  744.23.
    BIS response: BIS does not agree that testing equipment is ``use'' 
equipment because testing is specifically listed under the definition 
of ``production'' in Sec.  772.1 of the EAR. However, this commenter's 
concerns should be addressed by the new exclusion for certain ``back-
end'' equipment under new paragraph Sec.  744.23(a)(5).
    Topic 31: A commenter requested that BIS exclude certain items from 
Sec.  744.23(a)(4) (former Sec.  744.23 (a)(2)(v)), particularly ECCN 
3B992.b.4.b and related EAR99 items for use in developing or producing 
other ECCN 3B992.b.4.b items, that are exclusively

[[Page 73431]]

for use in back-end activities. This commenter believes that 
controlling the export to China or Macau of these items is an 
unintended impact of the October 7 IFR. These controls have a far 
bigger and even more unintended impact on this commenter's U.S. 
suppliers of parts and components that ship to China for use in 
producing ECCN 3B992.b.4.b items. This commenter also requested that if 
a carve out for certain ECCN 3B992.b.4.b items cannot be added for 
``back-end'' activities, BIS should issue a temporary general license 
(TGL) to allow continued development and production of these items in 
China.
    BIS response: BIS agrees that the principal underlying the 
exclusion for back-end testing in Sec.  744.23(a)(5) should also apply 
to Sec.  744.23(a)(4), see discussion below under section C.11. BIS has 
also added a new TGL to allow companies to continue exporting less 
restricted SME ``parts,'' ``components,'' or ``equipment'' to 
destinations in Country Group D:5 countries (including China) and Macau 
if the recipient is ``developing'' or ``producing'' ``parts,'' 
``components, or ``equipment'' at the direction of a U.S. or Country 
Group A:5 or A:6-headquartered company that is not majority owned by an 
entity headquartered in either Macau or a destination specified in 
Country Group D:5.

Technology Nodes Under Advanced Node ``Facility'' End-Use Controls

    Topic 32: A commenter noted that the phrase ``technology node'' in 
Sec. Sec.  744.6 and 744.23 does not have a consistent technical 
meaning and could refer to the smallest resolvable feature at varying 
fields or pitch characteristics. To illustrate the complexity of this 
issue, clever proprietary techniques (e.g., double patterning, multi-
pass) can make equipment exclusively intended for larger features 
capable of producing smaller features.
    BIS response: BIS agrees. This SME IFR adds a new Note to the 
definition of ``advanced-node integrated circuits'' in Sec.  772.1 to 
define the term ``technology node'' to refer to the Logic Industry 
``Node Range'' figure described in the ``International Roadmap for 
Devices and Systems,'' 2016 edition (``More Moore'' White Paper). BIS 
welcomes comment on this definition in response to this SME IFR.
    Topic 33: A commenter noted that BIS needs to define half-pitch or 
otherwise describe how one determines whether a DRAM IC ``uses a 
production technology node of 18 nm half-pitch or less for purposes of 
Sec. Sec.  744.6(c)(2)(i) and 744.23(a)(2).'' The commenter noted that 
the October 7 IFR did not do so and requested that BIS publicly 
identify the correct methodology.
    BIS response: BIS agrees. This rule revises Sec. Sec.  734.4(a)(3), 
744.6(c)(2)(i) and (ii), and 744.23(a)(2) to refer to a new definition 
of ``advanced-node integrated circuits'' set forth in Sec.  772.1. This 
definition specifies the calculation methodology for determining 
whether a DRAM IC uses a ``production technology node of 18 nanometer 
half-pitch or less.''
    Topic 34: A commenter requested that BIS draw a distinction between 
semiconductor fabrication processing test equipment, which does warrant 
control, and semiconductor screening test equipment, which does not. 
This commenter noted that there are two primary categories of 
semiconductor test equipment: (1) semiconductor fabrication processing 
test equipment, which provides measurements for process control 
parameters and ensures that Chemical Vapor Deposition (CVD), Physical 
Vapor Deposition (PVD), lithography, and other pieces of equipment and 
additive manufacturing processes work as required to produce the 
semiconductor; and (2) semiconductor screening test equipment, which 
provides measurements used to establish if individual manufactured 
devices satisfy quality requirements and can be shipped. This commenter 
noted that former items are necessary to the proper operation of a 
semiconductor fabrication plant, and include essential elements used 
during the fabrication process to produce a viable semiconductor.
    BIS response: This comment is addressed by the addition of new 
paragraph Sec.  744.23(a)(5) in this SME IFR, described in greater 
detail below in section C.11. BIS has created a distinction between 
these two types of test equipment. As described by this commenter, 
semiconductor fabrication processing test equipment appears to include 
equipment that is used in front-end integrated circuit fabrication 
steps, while semiconductor screening test equipment would appear to be 
used only in back-end production steps. If the semiconductor screening 
test equipment is used exclusively in back-end production stages that 
do not alter the technology level of the ICs produced, the equipment 
does not trigger the end-use scope in paragraphs Sec.  744.23(a)(2) or 
Sec.  744.6(c)(2)(i) and (ii), because this type of test equipment 
qualifies for the back-end exclusion under paragraph Sec.  744.23(a)(5) 
and the exclusion in Sec.  744.6(d)(3).

SME End-Use Controls and Their Relationship to Nodes of Concern

    Topic 35: A commenter noted that Sec.  744.23(a)(4) (former Sec.  
744.23(a)(2)(v)) overreaches because it is not tied to the end use of 
concern. This commenter noted that because Sec.  744.23(a)(4) is so 
broad, vendors cannot supply any U.S.-origin equipment or parts that 
will be used in the ``development'' or ``production'' in China or Macau 
of any ``parts,'' ``components,'' or ``equipment'' specified under ECCN 
3B001, 3B002, 3B090, 3B611, 3B991, or 3B992, even though such activity 
does not require a license under Sec.  744.23(a)(2).
    BIS response: BIS has narrowed both the product scope and end use 
scope of Sec.  744.23(a)(4) in light of U.S. national security 
concerns. That section has been narrowed to items subject to the EAR 
and specified on the CCL by this rule. As noted above, Sec.  
744.23(a)(4) restricts the ``development'' and ``production'' of items, 
including node-agnostic front-end tools, that would erode the 
effectiveness of other end-use controls on the ``development'' or 
``production'' of advanced-node ICs. Section 744.23(a)(4) also more 
broadly inhibits the development of an indigenous ecosystem in Macau or 
destinations specified in Country Group D:5 for the ``development'' and 
``production'' of front-end SME, which supports the longer-term 
effectiveness of controls with respect to advanced-node IC controls. As 
noted elsewhere, BIS welcomes comment on whether there are specific 
front-end SME items that are used exclusively in legacy production. 
Moreover, to address the commenter's concerns about the breadth of this 
control, BIS is issuing a new TGL in this SME IFR. See discussion in 
section C.6 of this rule.
    Topic 36: A commenter asked BIS to limit the scope of Sec.  
744.23(a)(4) (former Sec.  744.23(a)(2)(v)) to higher-end advanced-node 
capabilities and exclude items used in legacy ``production.'' The 
commenter also suggested that BIS consider limiting the end-use 
restrictions under Sec.  744.23(a)(4) on exports of 3B991 items to 
China or Macau to items capable of use in higher-end advanced-node 
capabilities and exclude items in paragraphs of 3B991 that are not 
designed for semiconductor manufacturing.
    BIS response: BIS partially adopted this recommendation by 
narrowing both the product scope and end-use scope of paragraph (a)(4), 
but not by technology level. See discussion in section C.11.c. BIS also 
notes that the presumption of denial license review policy leaves room 
for an applicant to make a case for

[[Page 73432]]

approval, unlike a policy of denial. Also note that many of the 
parameters for SME in ECCN 3B001 have been changed from ``capable of'' 
to ``designed for.'' Separately, BIS welcomes additional feedback from 
this commenter, or any other interested party, on whether specific 
3B991 items warrant exclusion from the scope of Sec.  744.23(a)(4), for 
reasons including if they are not used in IC manufacturing or are 
exclusively used at legacy production technology nodes.

Requested Changes or Clarifications to Sec.  744.23

    Topic 37: A commenter noted that difficulty in identifying fabs of 
concern will lead to overcompliance or delays relating to obtaining 
licenses that may not be needed. This commenter noted that in 
situations where a company is unable to determine whether a fabrication 
facility is a covered fabrication facility, the most likely course of 
action is (i) to over-comply and abandon a transaction for fear of 
potential non-compliance or (ii) seek a license and risk loss of the 
business as a result of delay, even when ultimately the fabrication 
facility in question is not a covered fabrication facility.
    BIS response: BIS shares concerns that the new Sec.  744.23 from 
the October 7 IFR may result in over compliance or delays related to 
obtaining unnecessary licenses. BIS recognized similar issues with the 
expanded MEU List and Sec.  744.21, but after BIS developed outreach 
materials, including FAQs for the application of Sec.  744.21, these 
trends were reduced considerably. BIS anticipates that the addition of 
Sec.  744.23 and the expanded U.S. person control under Sec.  744.6 
will follow a similar pattern.

Narrow the Scope of Sec.  744.23 Fabrication Controls

    Topic 38: A commenter noted that there does not appear to be a 
national security basis for excluding equipment sales to NAND memory 
fabricating facilities in China because NAND memory is so widely 
available on the commercial market. This regulation will harm U.S. 
companies and jobs while boosting the market share gain of our allies 
where the majority of NAND memory is manufactured.
    BIS response: BIS disagrees with this commenter's characterization 
of the controls. The end use control under Sec.  744.23 and the ``U.S. 
persons'' control under Sec.  744.6 both now reference the newly 
defined term ``advanced-node integrated circuits'' added by the SME 
IFR. That term specifies NAND memory as part of the criteria as well as 
the level of NAND memory that is a concern (i.e., NOT AND (NAND) memory 
integrated circuits with 128 layers or more). This higher threshold for 
NAND memory was intended to distinguish between the type of items 
easily obtained on the open market and the types of NAND memory that 
represent national security and foreign policy concerns under the 
October 7 IFR.

Changes to License Review Policies

    Topic 39: A commenter requested BIS replace the current one-size-
fits-all presumption of denial for all license requests (under Sec.  
744.23(d)) with a review policy that accounts for the specific items 
involved and their potential for direct use in sensitive or advanced-
node IC manufacturing.
    BIS response: BIS revised the license review policy under Sec.  
744.23(d) to include a presumption of approval license review policy 
when there is a foreign-made item available that is not subject to the 
EAR and performs the same function as the item subject to the EAR, and 
for end users headquartered in the United States or a destination in 
Country Group A:5 or A:6, that are not majority-owned by an entity 
headquartered in either Macau or a destination specified in Country 
Group D:5. As a result, the presumption of denial license review policy 
does not cover all transactions. In addition, the license review will 
take into account factors including technology level, customers, and 
compliance plans.
    Topic 40: A commenter noted that their company's very existence 
requires being able to obtain a license to continue to engage in their 
activities in China that would otherwise be restricted under Sec.  
744.23(a)(4) (former Sec.  744.23(a)(1)(v)) and that the financial 
impact of these new regulations to this company is massive. This 
commenter noted that the company's engineering team has been advised to 
cease all operations and the company's supply chain team has no work 
because all exports have been put on hold. The company depends on 
receiving authorization to export parts, software, and technology for 
the development and production of ECCN 3A991.b.1.c crystal pullers, 
used to produce ingots and wafers, to China.
    BIS response: Upon request, BIS has authorized certain types of 
transactions requiring a license under Sec.  744.23(a)(4) with 
authorization letters (ALs). BIS is not able to publicly confirm 
whether this specific commenter obtained an AL because of 
confidentiality requirements under ECRA. The ALs reflect a policy to 
impact ``development'' and ``production'' of SME by indigenous 
companies located in China. BIS has transitioned away from using ALs to 
address these types of issues to BIS licenses and other more standard 
means of authorization.
    Topic 41: One commenter expressed concern that the time required to 
obtain a license would eliminate one of its key competitive advantages 
for supplying EAR99 items. The commenter feared that even if they were 
granted a license, the delays caused by the application process for 
each order of their commodities would eliminate their lead-time 
advantage over its foreign competitors.
    BIS response: Recognizing the availability of EAR99 items from 
multiple sources, BIS has narrowed the product scope of Sec.  
744.23(a)(4) to items subject to the EAR and specified on the CCL, 
which eliminates the license requirement for EAR99 items for SME. 
Separately, BIS acknowledges that exports that can be made without a 
license are more quickly executed. However, because a purchase order is 
not required under the EAR to apply for a BIS license, it is possible 
to obtain licenses in advance, which may help address the potential for 
delays. BIS also notes that licenses are generally valid for a four-
year period. Once the license is in place, a company may ship with the 
same speed at which it did previously when the items could be exported 
without a license. There is also the possibility that the transaction 
may be eligible for a TGL or exclusion. The license applicant would 
need to know the particulars of the transaction to apply for a BIS 
license.

Additional Guidance on the Scope of SME End-Use Controls

    Topic 42: A commenter stated it is inconsistent that Sec.  
744.23(a)(4) (former Sec.  744.23(a)(1)(v)) does not establish a 
license requirement for AT-controlled end-item equipment when not for 
``development'' or ``production'' in the China or Macau of any 
``parts,'' ``components,'' or ``equipment'' specified under ECCN 3B001, 
3B002, 3B090, 3B611, 3B991, or 3B992, but a license is required for 
items destined for use in the ``development'' or ``production'' of 
``parts'' or ``components'' for AT-controlled end-item equipment.
    BIS response: BIS does not believe this result is inconsistent with 
the policy objectives of the October 7 IFR. The purpose of Sec.  
744.23(a)(4) is to prevent the indigenous ``development'' or 
``production'' of items having national security implications that 
could erode or circumvent the effectiveness of other end-use controls,

[[Page 73433]]

particularly Sec.  744.23(a)(2). This objective is not affected by the 
export, reexport, or transfer (in-country) of AT-controlled equipment 
that is already developed or produced, assuming the equipment is not 
destined for a prohibited end use (e.g., those enumerated in Sec.  
744.23(a)(1) and (2)).
    Topic 43: A commenter stated that Sec.  744.23(a)(4) (former Sec.  
744.23(a)(2)(v)) does not include ``incorporation'' of EAR99 items into 
Category 3B items. This commenter notes that the wording in Sec.  
744.23(a)(4) prohibits the ``development'' or ``production'' of 
Category 3B items. This commenter believes that if BIS wanted to 
prohibit the incorporation of EAR99 items (e.g., screws and tubing) 
into Category 3B items, it should have prohibited the incorporation of 
any item that is subject to the EAR into a Category 3B item under Sec.  
744.23(a)(4), just as it did in Sec.  744.23(a)(2).
    BIS response: BIS has narrowed the product scope in paragraph 
(a)(4) to items subject to the EAR and specified on the CCL. This said, 
former Sec.  744.23(a)(2)(v) would have captured the incorporation of 
an EAR99 item into a Category 3B item if the incorporation occurred 
during the ``development'' or ``production'' of the 3B item. The term 
``production'' is defined to include all production stages, such as 
manufacture, integration, and assembly, each of which could encompass 
the activity described by the commenter, depending on the details of 
the scenario. However, as noted below, BIS omitted the term 
``incorporation'' from Sec.  744.23(a)(4) to avoid capturing 
incorporation of an item (e.g., a replacement part) subject to the EAR 
into a 3B item after that 3B item is already ``developed'' or 
``produced.'' Such incorporation would be addressed by other end-use 
controls. For this reason, incorporation of an EAR99 item into an item 
that is already ``produced'' (e.g., a tool already in operation in 
volume production) is not within the scope of Sec.  744.23(a)(4). These 
types of transactions are instead addressed under end-use controls in 
Sec.  744.23(a)(2). At the same time, BIS reiterates that Sec.  
744.23(a)(4) still captures items destined for use in all stages of the 
``development'' or ``production'' of such 3B equipment, up to and 
including qualification for ultimate use. For example, Sec.  
744.23(a)(4) would capture exports of CCL items destined for use by a 
research and development facility involved in qualifying unfinished 3B 
equipment as part of the final ``development'' or ``production'' stages 
for that equipment. By contrast, Sec.  744.23(a)(4) does not capture 
exports of CCL items (among others) destined for the operation, 
installation (including on-site installation), maintenance (checking), 
repair, overhaul, or refurbishing of equipment that is already 
``developed'' and ``produced.'' Other provisions in Sec.  744.23(a)(2) 
may be applicable to this scenario.
    Topic 44: A commenter asked BIS to confirm that a U.S. person's 
shipment to China, from outside the United States, of foreign-origin 
items that are not subject to the EAR, but which are destined for use 
in developing or producing items described in a Group 3B ECCN, are not 
subject to EAR licensing requirements under Sec.  744.23(a)(4) (former 
Sec.  744.23(a)(2)(v)). This commenter noted that they asked for this 
clarification because Sec.  744.23(a)(4) prohibits the unlicensed 
export, reexport, and transfer of items subject to the EAR if there is 
knowledge the items will be for the development or production of 
commodities described in Group 3B ECCNs. The commenter clarified that 
this question assumes that there are no Footnote 1 or Footnote 4 
entities or other Sec.  734.9 issues involved in the transaction. This 
commenter noted that the difference in scope indicates that a U.S. 
person's shipment of items not subject to the EAR for use in producing 
Group 3B items in China is not covered by the new rules.
    BIS response: Section 744.23 does not control the export, reexport, 
or transfer (in-country) of items not subject to the EAR, however, 
Sec.  744.6 of the EAR does. Depending on the classification of the 
foreign item and the specific end use of the item, Sec.  
744.6(c)(2)(ii) or (iii) may impose a license requirement for items 
that will be for the development or production of commodities described 
in Group 3B ECCNs. However, foreign persons engaged in such conduct or 
directing U.S. persons to do so may be viewed as engaging in activities 
contrary to U.S. national security or foreign policy interests. 
Accordingly, the End-user Review Committee could add such foreign 
person to the Entity List. For example, see BIS's publication of Entity 
List additions published on December 19, 2022 (87 FR 77505).
    Topic 45: A commenter asked BIS to clarify whether a license would 
be required under Sec.  744.23(a)(4) (former Sec.  744.23(a)(2)(v)) to 
export an item subject to the EAR to a third party Original Equipment 
Manufacturer (OEM) in a third country, where there is ``knowledge'' at 
the time of the export that the item would be incorporated into a 
foreign-made 3B991 item (not subject to the EAR) by the OEM in the 
third country, and that the OEM would then send the 3B991 item to a 
manufacturer of Category 3 items in China. This commenter noted that 
Sec.  744.23(a) does not expressly state that the ``End Use Scope'' 
includes the end use of the item into which the exported item is 
incorporated, and this differs from other EAR provisions, such as the 
foreign direct product (FDP) rules under Sec. Sec.  734.9 and 
744.23(a)(1)(ii)(B), which expressly include ``incorporated into'' as 
part of the end-use scope.
    BIS response: This commenter did not clarify whether they intended 
the ``Category 3'' items (i.e., the items being developed or produced 
in China) to mean only items in Category 3A (e.g., ICs) or other items 
in Category 3 (e.g., items in Category 3B). Assuming the commenter 
refers to Category 3A items, more information would be required to 
determine whether the 3B991 item is ``destined for'' a prohibited end 
use, e.g., under Sec.  744.23(a)(2). However, if the commenter refers 
to Category 3B items in ECCN 3B001 (except 3B001.g, .h, and .j), 3B002, 
3B611, 3B991 (except 3B991.b.2), or 3B992, a license would be required 
to export the initial item subject to the EAR (if specified on the CCL) 
to the third-party OEM. Unless captured by an exclusion in Sec.  
744.23(a)(5), Sec.  744.23(a) requires a license when there is 
``knowledge'' at the time of export, reexport, or transfer (in-country) 
that an item subject to the EAR described in paragraphs (a)(1) through 
(4) is ``destined for'' a destination, end use, or type of end user 
described in paragraphs (a)(1) through (4) of Sec.  744.23. Paragraph 
(a) of this section captures items when ``you have ``knowledge'' at the 
time of export, reexport, or transfer (in-country) that the item is 
destined for a destination, end use, or type of end user described in 
paragraphs (a)(1) through (4) of this section. . . .''. Paragraph 
(a)(4) then describes the activities that meet the end-use scope of the 
prohibition, specifically the ``development'' or ``production'' of 
`front-end integrated circuit ``production'' equipment' and 
``components,'' ``assemblies'' and ``accessories'' specified in certain 
Category 3, Group B ECCNs. Read together, these provisions prohibit the 
export, reexport, or transfer (in-country) when you have ``knowledge,'' 
at the time of export, that the item subject to the EAR that is 
identified on the CCL ``is destined for'' the ``development'' or 
``production'' of `front-end integrated circuit ``production'' 
equipment' and ``components,'' ``assemblies'' and ``accessories'' of 
the covered SME set forth in paragraph (a)(4). This ``knowledge'' that 
the item ``is destined for'' (either in its original form or as 
subsequently incorporated into a

[[Page 73434]]

foreign-made product) a prohibited activity is sufficient to trigger 
the applicable license requirement at the time the item subject to the 
EAR is exported, reexported, or transferred (in-country). For this 
reason, BIS does not consider the incorporation of the item into a 
foreign-made product not subject to the EAR to be relevant to the Sec.  
744.23 license requirement. BIS officials have provided similar and 
consistent guidance on these types of upstream transactions that 
involve ``knowledge'' that the item ``is destined for'' a prohibited 
end use, including in the context of other part 744 end uses. As to the 
relevance of the term incorporation, BIS uses this term in Sec. Sec.  
734.9(e) and 744.23(a)(1)(ii)(B) to capture items for use in a foreign-
produced item or a ``supercomputer,'' respectively, that may already be 
``produced.'' As indicated in response to other comments in this rule, 
the absence of the term incorporation from Sec.  744.23(a)(4) avoids 
capturing the incorporation (outside the context of ``production'') of, 
e.g., replacement parts or components into SME that is already 
produced. If the SME is otherwise involved in a separate prohibited end 
use (e.g., it is used in the ``production'' of ``advanced-node 
integrated circuits''), the transaction must be analyzed separately 
with respect to any other relevant provisions of the EAR. Note: In this 
scenario, such knowledge similarly triggers a license requirement for 
the items identified in Sec.  744.23(a)(4) when a person knows at the 
time of export that an item subject to the EAR and specified on the CCL 
``is destined for'' (either in its original form or as subsequently 
incorporated into a foreign-made ECCN 3B991 product) a party listed in 
supplement no. 4 to part 744 of the EAR.

Other Requested Clarifications to Sec.  744.23

    Topic 46: A commenter asked BIS to confirm how far back up the 
supply chain the licensing obligation extends for an export of an item 
to a third party for use in developing or producing a whole new 
foreign-made item that will only later be used in the development or 
production of ICs at a covered facility. This commenter described a 
scenario in which someone exports an item to produce a foreign-made 
item, which will be used to produce another foreign-made item, which 
will later be used at a covered fabrication facility, and asked whether 
the original export is caught by the new licensing obligations if there 
is knowledge that this supply chain will ultimately result in the 
creation of an item used to produce ICs at a covered fabrication 
facility. The commenter further inquired about the transfer outside the 
United States of items subject to the EAR to produce foreign-made items 
when only a small percentage of the foreign-made items will be for use 
at a covered fabrication facility. Specifically, the commenter asked 
whether BIS takes the position that 100% of all such transfers require 
a license by the foreign parties even when only an unknown small 
percentage will be used in the production of items that will ultimately 
be destined to covered fabrication facilities.
    BIS response: If the exporter has ``knowledge'' at the time of 
export, reexport, or transfer (in-country) that the item is ultimately 
destined for a prohibited end use, the license requirement would extend 
to the original export, reexport, or transfer (in-country). If not 
properly authorized, then a subsequent party would be prohibited from 
relying on de minimis for an item that was involved in an EAR violation 
pursuant to Sec.  764.2(e). See also BIS response to Topic 45.
    Topic 47: A commenter noted that clarification of Sec.  
744.23(a)(2)(iv), which has been redesignated as paragraph (a)(2)(ii) 
in this SME IFR is needed if this imposes an affirmative duty to know 
or otherwise be subject to a license requirement. The commenter asks 
whether this means that a license is required when a company is 
exporting products to China and cannot confirm whether the 
semiconductor fabrication facility is producing products that meet the 
specified criteria in paragraphs (a)(2)(iii)(A) through (C), which has 
been redesignated as paragraphs (a)(2)(i) and (ii) in this SME IFR.
    BIS response: Yes, if the exporter, reexporter, or transferor has 
``knowledge'' that an item identified in Sec.  744.23(a)(2)(iv), which 
has been redesignated as paragraph (a)(2)(ii) in this SME IFR will be 
used in the ``development'' or ``production'' of ICs in China or Macau, 
but does not have ``knowledge'' of whether such ICs are or will be 
``advanced-node integrated circuits,'' a license is required. This BIS 
response would also apply to a similar scenario in which an exporter, 
reexporter, or transferor has positive ``knowledge'' that their 3B/C/D/
E products are used by some number of entities engaged in legacy 
development/production, but they do not know how 100% of their product 
is used (e.g., because they are an upstream distributor and cannot keep 
track of all of it). A license is required to ship 100% of the items, 
unless the exporter, reexporter, or transferor can determine which 
items of the 100% will not be used in the ``development'' or 
``production'' of ICs in China or Macau, which would be excluded from 
the license requirement under Sec.  744.23(a)(2)(iv), redesignated as 
paragraph (a)(2)(ii) in this SME IFR.

Separate SME End-Use Controls Into Their Own Section and Provide More 
Specificity on Items Covered

    Topic 48: A commenter requested that it would be easier to navigate 
the controls in Sec.  744.23, if the prohibitions under Sec.  
744.23(a)(2) and (4) (former Sec.  744.23(a)(1)(iii) and (a)(2)(iii) 
and (a)(1)(v) and (a)(2)(v)) were in separate sections. Also given the 
broad scope of Sec.  744.23(a)(4), this commenter requested creating 
new items level paragraphs under ECCNs 3B001, 3B002, 3B090, 3B611, 
3B991, and 3B992 that identify the types of equipment that BIS intends 
to control under Sec.  744.23(a)(4) rather than ``catching'' such a 
broad spectrum of semiconductor manufacturing and test equipment.
    BIS response: BIS has reformatted the controls in Sec.  744.23(a) 
by combining the product scope and end use scope into one paragraph for 
each type of item: (a)(1) ``supercomputers,'' (a)(2) ``advanced-node 
integrated circuits,'' and (a)(4) semiconductor manufacturing 
equipment. With respect to Sec.  744.23(a)(4), BIS clarifies here and 
elsewhere in this rule that a license is required for items subject to 
the EAR specified on the CCL when destined to an entity headquartered 
and located in either Macau or a destination specified in Country Group 
D:5 for use in the ``development'' or ``production'' of `front-end 
integrated circuit ``production'' equipment' and certain 
``components,'' ``assemblies'' and ``accessories'' in ECCN 3B001 
(except 3B001.g, .h, and .j), 3B002, 3B611, 3B991 (except 3B991.b.2), 
or 3B992. If the exporter ``does not know'' the technology node for 
which a 3B item will be used (see Sec.  744.23(a)(2)), then that is the 
only situation where the catch-all license requirement would apply for 
the export, reexport, or transfer (in-country). All the other end-use 
controls in Sec.  744.23(a) now have specific product scopes.

Acceptable Level of Due Diligence for Sec.  744.6(c)(2)

    Topic 49: A commenter requested BIS clarify whether it would be 
sufficient under Sec.  744.6 to have an end user certify that the 
exported item will not be used in ``the ``development'' or 
``production'' in China of any ``parts,'' ``components,'' or 
``equipment'' specified under ECCN

[[Page 73435]]

3B001, 3B002, 3B090, 3B611, 3B991, or 3B992.
    BIS response: BIS interprets this comment to refer to the end-use 
control under Sec.  744.23(a)(4) (former Sec.  744.23(a)(2)(v)), as 
there is no U.S. person control under Sec.  744.6(c)(2) with the 
characteristics described by the commenter. Obtaining an end-user 
statement, even if not required under the EAR, is a good compliance 
practice, but is not by itself determinative. The exporter, reexporter, 
or transferor must evaluate all the information that it obtains during 
the normal course of business to determine if it has ``knowledge'' that 
the item is ultimately destined for use in a prohibited activity. BIS 
also reminds exporters, reexporters, and transferors that they may not 
self-blind to avoid these license requirements and that the act of 
self-blinding would be a violation of the EAR.
    Topic 50: A commenter expressed concern about the October 7 IFR's 
restrictions on U.S. persons' activities under Sec.  744.6(c)(2), 
including at semiconductor fabrication facilities and branches of 
certain multinational companies in China that are headquartered in the 
United States, South Korea, Taiwan, and other destinations. The 
application of such restrictions to the ``shipping, transmitting, or 
transferring (in-country) of any item not subject to the EAR to 
development [of] a chip at a proscribed level'' is extremely broad.
    BIS response: This SME IFR adds an exclusion in Sec.  744.6(d)(4) 
for companies headquartered in the United States or in a destination 
specified in Country Group A:5 or A:6 and not majority-owned by an 
entity that is headquartered in either Macau or a destination specified 
in Country Group D:5. The exclusion will authorize ``U.S. persons'' to 
engage in activities that would otherwise be prohibited under Sec.  
744.6(c)(2)(i) through (iii).

Information Needed From Other Parties To Comply With These Controls

    Topic 51: A commenter noted that most companies that ship items 
caught under 3B, 3C, 3D, or 3E, will not be able to determine whether 
items are going to a prohibited semiconductor fabrication facility, 
e.g., for companies that supply components or materials, as there may 
be many layers of purchasing between themselves and any covered 
fabrication facility engaged in the ``development'' or ``production'' 
of NAND, logic, or DRAM integrated circuits. This commenter noted that 
it is also possible that some companies will conclude that the new 
controls require exporters, reexporters, and transferors of such items 
to find out the answer to this question for each shipment or for group 
transactions.
    BIS response: BIS is aware that the end-use control under Sec.  
744.23(a)(2)(iv), which has been redesignated as paragraph (a)(2)(ii) 
in the AC/S IFR, may present a compliance challenge for certain 
exporters, reexporters, or transferors, but this control is important 
for protecting U.S. national security and foreign policy interests. 
Companies in China that are transparent with their capabilities with 
exporters, reexporters, and transferors will see a reduced impact of 
Sec.  744.23(a)(2)(iv), now redesignated as paragraph (a)(2)(ii), and 
those that are not transparent will see an increased impact of Sec.  
744.23(a)(2)(ii).

Temporary General License and Supply Chain Authorization Letters (ALs)

    Topic 52: A commenter noted that the TGL played a major role in 
avoiding disruptions to supply chains and that the TGL was critical to 
maintain continuing operations and avoid major business disruptions. 
This commenter also requested that the TGL be extended for at least one 
year to allow time to build the capacity to relocate supply chain 
activities outside of China.
    BIS response: BIS interprets this comment's reference to the 
``TGL'' to refer to the supply chain ALs issued in the wake of the 
October 7 IFR. BIS addresses issues related to the existing TGL for 
3A090 and related items in this second IFR. Separately, with respect to 
SME, BIS has issued a new TGL for less restricted SME ``parts,'' 
``components,'' or ``equipment'' to address other more significant 
supply chain disruptions arising from the October 7 IFR. BIS's 
experience with the original TGL was that it played a helpful role in 
the initial transition to the October 7 IFR, but that it was only used 
by a small set of companies engaged in making ECCN 3A090 ICs and 
related items. Prior to April 7, 2023, when that TGL expired, these 
exporters, reexporters, and transferors were able to obtain other 
authorizations as needed to continue with these types of activities in 
China or Macau. For this reason, BIS does not intend to reinstate the 
TGL that expired.
    Topic 53: A commenter noted that the TGL from the October 7 IFR did 
not go far enough to eliminate all disruptions in semiconductor supply 
chains. This commenter noted that by forcing the termination of ``non-
listed activities'' that had already been occurring in China, the U.S. 
Government caused disruptions and supply chain related delays.
    BIS response: BIS regrets that companies may have paused or ceased 
activities that were not ultimately restricted by the October 7 IFR and 
encourages industry to engage with BIS to confirm the scope of controls 
when needed. Separately, BIS agrees that the original TGL was not broad 
enough in scope to address other unintended consequences of the October 
7 IFR, including those related to Sec.  744.23(a)(4) (former Sec.  
744.23(a)(2)(v)). However, BIS addressed these issues with ALs as 
warranted in consideration of supply chains, and BIS has subsequently 
issued licenses to address other specific unintended consequences 
related to the supply chains of U.S. and allied-destination companies. 
This issue is further addressed with the issuance of a new TGL and an 
exclusion in this SME IFR. The TGL is further discussed in section C.6 
of this rule and the exclusion to Sec.  744.23 is discussed in section 
C.11.
    Topic 54: Many commenters noted that industry needs longer-term and 
more permanent solutions than the ALs to relieve the unintended 
consequences of the October 7 IFR. These comments covered concerns both 
with respect to multinational fabrication facilities as well as 
companies that employ foreign nationals from China in the 
``development'' or ``production'' of Category 3B items. With respect to 
multinational fabrication facilities, one commenter requested that the 
ALs be extended with a two-year validity period.
    BIS response: BIS agrees that longer term authorizations are 
warranted, and that the one-year ALs were intended merely as a short-
term bridge. The new TGL in this SME IFR, which is valid until December 
31, 2025, temporarily authorizes specific activities with certain 
conditions and requirements, as applicable. BIS also notes that 
exporters, reexporters, and transferors may apply for BIS licenses to 
obtain long-term predictability or amendments to their Validated End 
Users (VEU) authorizations.

Other Ways That BIS Can Consult With Industry To Better Improve the 
Effectiveness of Policies in This Area

    Topic 55: A commenter noted that ECRA section 1765 (50 U.S.C. 4824) 
requires BIS to submit to Congress by the end of the year a report on 
the implementation of ECRA during the previous year. Subsection (a)(2) 
requires that the annual report include a description of ``the impact 
of [all that year's] controls on the scientific and technological 
leadership of the United States.'' In addition, ECRA section

[[Page 73436]]

1752(1) (50 U.S.C. 4811(1)) states that the United States should ``use 
export controls only after full consideration of the impact on the 
economy of the United States.'' Similarly, ECRA section 1752(3) states 
that the impact of the implementation of new controls on U.S. 
leadership and competitiveness ``must be evaluated on an ongoing basis 
and applied in imposing controls . . . to avoid negatively affecting 
such leadership.'' This commenter believes that it is important for BIS 
to obtain formal industry input on this specific topic so that its 
report to Congress is accurate and complete.
    BIS response: BIS agrees that it may be beneficial to allow for 
public input to assist BIS in preparing this annual report. BIS intends 
in the next annual cycle for this report to publish a notice to solicit 
comments in the area. BIS will then evaluate the amount and type of 
public input provided to the agency to determine if continuing to 
publish this type of notice is worthwhile in the future.

Advanced Computing FDP Rule--Sec.  734.9(h)

    Topic 56: A commenter noted that the new Sec.  734.9(h) Advanced 
computing FDP rule is not needed because it is already covered by pre-
existing Sec.  734.9(b) National Security FDP rule.
    BIS response: BIS does not agree. There is some cross over between 
these two FDP rules, but the Advanced Computing FDP rule extends to 
certain items that the National Security FDP rule does not, so the 
Advanced Computing FDP rule is necessary to address the national 
security and foreign policy concerns included in the October 7 IFR.

Meaning and Scope of `Support' Under U.S. Person Control in Sec.  
744.6(b)(6)

    Topic 57: A commenter noted that the exact definition of 
``support'' is not clear under the October 7 IFR. BIS should consider 
reconfiguring certain definitions to factor in business processes in 
the logistics sector. This commenter requested that BIS publish 
additional guidance on how logistics firms can understand and apply 
``support'' requirements to their supply chains without inducing severe 
operational disruptions.
    BIS response: The term `support' is defined for purposes of Sec.  
744.6 under paragraph (b)(6). BIS also notes that the term `support' is 
not a new term added in the October 7 IFR. However, based on the 
comments received in response to the October 7 IFR, BIS agrees that 
additional clarifications should be made on what types of activities 
involving `support' are excluded, such as certain logistics activities. 
The AC/S IFR states here that for logistics companies, the prohibited 
act is the actual delivery, by shipment, transmittal, or transfer (in-
country), of the item and the act of authorizing the same.
    Topic 58: A commenter noted that it is unclear whether U.S. person 
``support'' for semiconductor fabrication is limited to shipping, 
transmitting, transferring or servicing items for advanced PRC 
fabrication facilities, or if it also includes the broad scope of 
``support'' in Sec.  744.6(b), including performing any contract, 
service, or employment that you ``know'' may assist or benefit advanced 
semiconductor fabrication in China.
    BIS response: BIS's answer to FAQ IV.A2, published on its website, 
specifies that it only applies to Sec.  744.6(c)(2). As such, it is 
intended to provide exhaustive guidance for paragraph (c)(2), but not 
otherwise limit the scope of Sec.  744.6(b) or apply to other uses of 
the term facilitate or facilitation found elsewhere in the EAR. 
However, BIS also cautions ``U.S. persons,'' as well as any other 
person, that may have acquired technology or software source code in 
the United States, that the subsequent release of that ``technology'' 
or software source code to PRC nationals would be regulated under the 
EAR as a release, and if subject to the October 7 controls or the 
controls in either the AC/S IFR or SME IFR, will require a license.

What activities are considered `facilitating' under the U.S. person 
control?

    Topic 59: Some commenters noted that there is not an adequate 
definition of ``facilitation'' under Sec.  744.6 or any other EAR 
provision that provides the industry with sufficient detail to comply 
with the law and request licenses when necessary.
    BIS response: For purposes of Sec.  744.6(b)(6)(iii), BIS intends 
facilitating such shipment, transmission or transfer (in-country) to 
means to make easier by helping to bring about. Facilitation does not 
include administrative, clerical, legal advice, or regulatory advice 
activities, but does include any other activity that is directly 
responsible for bringing about such a prohibited activity is covered 
under facilitation.
    Topic 60: One commenter asked BIS to assess eight types of 
activities and provide guidance on whether they amount to 
``facilitation.''
    BIS response: BIS would not consider the following five activities 
to be ``facilitation,'' provided that they are performed by 
administrative or clerical staff and are undertaken only to carry out a 
decision maker's decision to export, reexport, or transfer (in-country) 
items that may require a license under the EAR: provision of back-
office services that help the business to function, such as IT 
services, financial services, or human resources support; order intake 
and processing; invoicing and cash or receivables collection 
activities; legal advice and counseling on the requirements of the EAR 
or other compliance obligations; and referring any matters or 
opportunities to non-U.S. persons. Two other activities raised by the 
commenter would not require a license because although they are a type 
of facilitation that would otherwise be prohibited, they have been 
authorized and, as such, the ``U.S. person'' could engage in these 
types of authorized facilitation activities: trade compliance clearance 
of licensed shipments or other authorized activities with PRC 
semiconductor customers including Entity List parties and providing 
administrative and limited servicing support for shipments to Entity 
List parties authorized by BIS licenses.
    Finally, with respect to ``management oversight by U.S. persons 
located in China or abroad,'' BIS would need additional information on 
whether the oversight involves decisions to export, reexport, or 
transfer (in-country) items that require a license under the EAR. If it 
did, the oversight as a type of facilitation would require a license.
    Topic 61: A commenter asked whether knowledge of a violation is a 
requirement to trigger the license requirements under Sec.  744.6.
    BIS response: Yes, the ``U.S. person'' control under Sec.  744.6 is 
triggered by ``knowledge.'' This SME IFR revises the paragraph (c)(2) 
introductory text to make this point more clearly.
    Topic 62: A commenter asked whether BIS will presume that a 
company's executives (e.g., chief executive officer (CEO), chief 
financial officer (CFO), chief operating officer (COO), President, 
Board of Directors) ``facilitated'' a restricted transaction, even if 
those company executives were ``U.S. persons'' but did not have 
knowledge of a violative transaction. The commenter further asks BIS to 
provide distinguishing examples.
    BIS response: These types of scenarios would be case specific and 
may lead to different outcomes depending on the nature of the company's 
work and the role that the official plays in that company and in the 
activity at issue. If, as posited by the commenter, the official later 
asserted that they lacked the requisite knowledge, BIS would assess 
what the official knew or should have

[[Page 73437]]

known with respect to the prohibited activity. Limiting the information 
that would normally be coming to these officers may result in a 
violation of the EAR, if it is determined these steps were taken to try 
to avoid EAR license requirements. For officers that do receive 
information about transactions that may otherwise be prohibited under 
Sec.  744.6, BIS would look at the role of that corporate officer and 
whether their decisions on behalf of the company would otherwise be 
prohibited under one of the `support' activities under Sec.  744.6.
    Topic 63: A commenter asked BIS to identify what compliance methods 
the agency recommends for U.S. persons employed by multinational 
companies that engage in restricted transactions listed under Sec.  
744.6.
    BIS response: First, the entity and natural persons all should 
identify whether they are ``U.S. persons'' as defined in Sec.  772.1. 
If the company is a ``U.S. person,'' then all activities of that 
company will need to be reviewed in accordance with the ``U.S. person'' 
control. If it is only certain natural persons at a company that are 
``U.S. persons,'' then those ``U.S. persons'' need to be aware of the 
Sec.  744.6 end-use controls and comply with those as applicable, which 
may involve simply excluding themselves from those types of activities 
or obtaining a BIS license as needed. BIS notes that the SME IFR 
published elsewhere in this issue of the Federal Register also adds 
several exclusions to Sec.  744.6(d), which may be applicable as well.

C. Expansion of Export Controls on Semiconductor Manufacturing Items

    This section describes the specific EAR revisions adopted in this 
IFR, which expand and refine the October 7 IFR with respect to 
semiconductor manufacturing and SME and addresses the national security 
concerns that led to an expansion of the country scope for SME and 
related software and technology.

Overview of EAR Amendments

    Principally, this rule removes ECCN 3B090 and replaces and expands 
its provisions in ECCNs 3B001 and 3B002. This rule also harmonizes 
revisions to controls on associated software and technology therefor. 
Among other harmonizing changes, BIS revises the heading of ECCN 3B001 
by adding the phrase ``and equipment for manufacturing semiconductor 
manufacturing equipment'' to reflect the expanded scope of items in 
this ECCN. BIS also adds a definition for ``Extreme Ultraviolet'' 
(``EUV'') to Sec.  772.1 because this term is now used within multiple 
ECCNs under 3B001, 3B002, and 3D003. Specific changes to ECCNs 3B001, 
3B002, 3D001, and 3E001 as well as information about the removal of 
ECCN 3B090 are described below, in sequential order of the ECCNs; see 
sections C.1 through C.4 of this rule. The rule also imposes 0% de 
minimis for ECCN 3B001.f.1.b.2.b (specified lithography equipment), 
discussed in section C.5 of this rule. The addition of a new TGL is 
discussed in section C.6. BIS also notes restrictions under Sec.  
740.2(a)(9) on the use of license exceptions for any of these ECCNs, 
discussed in section C.7 of this rule.
    BIS has determined that the newly added items under ECCNs 3B001 and 
3B002, and associated software and technology therefor, are, with 
limited exceptions, only used for fabricating logic ICs with non-planar 
transistor architecture or with a ``production'' `technology node' of 
16/14 nanometers or less. These items are controlled for National 
Security (NS) and Regional Stability (RS) reasons, and those changes 
are discussed in sections C.8 and C.9, respectively. As noted above, 
although these items are not yet formally controlled under a 
multilateral regime, the urgency and criticality of the U.S. national 
security concerns stated in section A dictate control pending adoption 
through the Wassenaar Arrangement. Each of the items added with this 
SME IFR are key to production of ``advanced-node integrated circuits,'' 
such as, advanced memory integrated circuits that will be necessary to 
enable new platforms to leverage advanced analytics or autonomy in ways 
that will be essential to the twenty-first century battlefield. Their 
inclusion in these controls reflect BIS's focused approach based on the 
critical national security applications of the most advanced ICs. For 
those that already hold a license that covers the expanded scope of 
controls, there is no need to reapply for a license.
    This rule also revises the activities of ``U.S. persons'' controls 
in Sec.  744.6 as well as Sec.  744.23 regarding ``supercomputer,'' 
``advanced-node integrated circuits,'' and semiconductor manufacturing 
equipment end use controls, and those changes are discussed in sections 
C.10 and C.11, respectively. The rule also adds two new definitions to 
Sec.  772.1, ``advanced-node integrated circuits'' and ``extreme 
ultraviolet,'' which are discussed in section C.12.

National Security Considerations for Expanding Controls and Country 
Scope

    This rule also expands the country scope of the controls for the 
items in this rule from ``China and Macau'' to ``Macau or destinations 
specified in Country Group D:5'' of supplement no. 1 to part 740. BIS 
imposed these new controls to protect U.S. national security interests 
by restricting China's military modernization efforts and degrading its 
ability to violate human rights, as well as the national security 
threats posed by other arms embargoed countries. The advanced computing 
integrated circuits (ICs), semiconductor manufacturing equipment (SME) 
essential to producing advanced-node ICs, and items used to further 
supercomputing capacity controlled through the October 7 IFR have 
profound implications for the future of international security. They 
are critical for the further development of not only weapons of mass 
destruction (WMD) but also many concerning emerging technologies such 
as advanced AI systems, autonomous weapons, cyberweapons, hypersonics, 
as well as high-tech surveillance applications which China has stated 
it will use in its next generation military capabilities and to engage 
in activities contrary to democratic values. These advances will result 
in future challenges to the United States' and partners' militaries as 
China pushes towards its goal of fielding a military by 2027 designed 
to deter U.S. intervention in a future cross-Strait crisis.
    The destinations described in Country Group D:5 and Macau are those 
BIS has previously identified as being destinations of national 
security concern, WMD developing countries, diversion countries of 
concern or as a country subject to a U.S. arms embargo or sanction, 
United Nations Security Council sanction, or countries that the 
Secretary of State has determined to be State Sponsors of Terrorism. 
Adding a license requirement for destinations in Country Group D:5 
(which includes all the countries in Country Group E, plus countries 
such as Afghanistan, Belarus, China, Iraq, Libya, Syria, Russia, and 
Venezuela) will provide greater visibility into the flow of 
semiconductor manufacturing equipment, associated development and 
production technology and software, as well as specially designed 
parts, components and assemblies therefor to other countries and their 
intended end uses. As noted in the February 6, 2023 Annual Threat 
Assessment of the U.S. Intelligence Community, ``foreign intelligence 
services are adopting cutting-edge technologies--from

[[Page 73438]]

advanced cyber tools to unmanned systems to enhanced technical 
surveillance equipment--that improve their capabilities and challenge 
U.S. defenses.'' The report noted that potential advances in 
semiconductors and high-performance computers by adversaries, including 
China, could pose challenges to the U.S. military.
    China in its latest Five-Year Plan is attempting to generate a 
self-sufficient design and production capacity of ``advanced-node 
integrated circuits'' to create ``secure and controllable'' indigenous 
supply chains. The United States--as a leader in the SME industry--must 
focus on and regulate the next increment of semiconductor development 
by controlling the export of critical SME and associated development 
and production technology and software, as well as activities of U.S. 
persons that support such SME development and production in countries 
of concern. These measures will help ensure ``advanced-node ICs'' are 
not going to end users and end uses of concern, which would threaten 
national security.
    The expanded country scope is implemented through amendments to 
Sec. Sec.  742.4 and 742.6, national security and regional stability 
reasons for control respectively, which are discussed in sections C.8 
and C.9 of this rule.
1. Revisions to ECCN 3B001
    This section discusses the amendments to ECCN 3B001. No changes 
were made to ECCN 3B001 paragraphs .b, .e, or .g through .j. The 
heading of ECCN 3B001 is revised by adding the phrase ``and equipment 
for manufacturing semiconductor manufacturing equipment'' after the 
word ``materials.''
    The License Requirement table is revised to apply NS:2 controls 
only to items listed in ECCN 3B001 prior to adoption of this rule. 
Newly listed ECCNs (3B001.a.4, c, d, f.1.b, and k to p, described 
below) are controlled for NS, RS, and AT reasons, as identified in new 
paragraphs under Sec. Sec.  742.4(a)(4) (NS) and 742.6(a)(6) (RS), 
which applies only to Macau and destinations specified in Country Group 
D:5. All of the items in the ECCN continue to be controlled for Anti-
Terrorism (AT) reasons and subject to an AT:1 license requirement. The 
License Requirement table is revised to identify these reasons for 
control.
    License Exception Shipments of Limited Value (LVS) eligibility is 
revised by removing eligibility for semiconductor manufacturing 
equipment specified in ECCN 3B001.a.4, c, d, f.1.b, k to p. Only 
license exceptions found in Sec.  740.2(a)(9) of the EAR may be used 
for specified semiconductor manufacturing equipment such as this.
    ECCN 3B001.a.4 is added to control equipment designed for silicon 
(Si), carbon doped silicon, silicon germanium (SiGe), or carbon doped 
SiGe epitaxial growth with specified parameters. BIS notes that the 
material referred to in 3B001.a.1 do not contain silicon and that the 
material in ECCN 3B001.a.4 includes silicon and silicon plus other 
specified elements. Items that are specified in ECCN 3B001.a.4 are 
controlled for NS reasons under Sec.  742.4(a)(4) and RS reasons under 
Sec.  742.6(a)(6)(i). Consistent with Sec.  742.4(b)(2) and (10), items 
specified in ECCN 3B001.a.4 will be reviewed consistent with license 
review policies in Sec.  744.23(d) of the EAR, except applications will 
be reviewed on a case-by-case basis if no license would be required 
under other provisions in part 744 of the EAR. The equipment included 
in ECCN 3B001.a.4 uses high-vacuum or inert environment technology to 
ensure highly clean and controlled conditions during the epitaxial 
growth process.
    ECCN 3B001.b is revised to add ``Semiconductor wafer fabrication'' 
in front of ``equipment designed for ion implantation'' in order to 
limit the application of this control to specific equipment.
    ECCN 3B001.c previously was used to control anisotropic plasma dry 
etching that was decontrolled in 2015 due to availability from 
countries that do not participate in the Wassenaar Arrangement. ECCN 
3B001.c.1 is now added to establish controls on equipment designed for 
dry etching, including isotropic dry etching as specified (ECCN 
3B001.c.1.a) and anisotropic dry etching as specified (ECCN 3B001.c.1.b 
and c.1.c). The atomically precise equipment described in this rule is 
only available from Wassenaar Arrangement Participating States. 
Isotropic dry etching is required for lateral etching. Gate-All-Around 
Field Effect Transistors (GAAFETs) and similar 3D structures with 
different brand names require lateral etching with high selectivity. 
Atomic layer etching enhanced by the features described in ECCN 
3B001.c.1.a., b., and c. produce the vertical edges required in high-
quality, leading-edge advanced devices and structures, including GAAFET 
and similar 3D structures. Note 1 is added to inform the public that 
ECCN 3B001.c includes etching by `radicals', ions, sequential 
reactions, or non-sequential reactions. Note 2 is added to inform the 
public of the types of etching that are included in the scope of ECCN 
3B001.c.1.b, e.g., etching using RF pulse excited plasma, plasma atomic 
layer etching, and plasma quasi-atomic layer etching. In addition, two 
technical notes are added to define two terms used in the control text 
of ECCN 3B001.c.1.a, c.2, and ECCN 3B001.c Note 1, which are `silicon 
germanium-to-silicon (SiGe:Si) etch selectivity' and `radical,' now 
defined in Technical Notes 1 and 2, respectively.
    ECCN 3B001.c.2 is added to control equipment designed for wet 
chemical processing and having a largest `silicon germanium-to-silicon 
etch selectivity' ratio of greater than or equal to 100:1. The 
definition for the term `silicon germanium-to-silicon (SiGe:Si) etch 
selectivity' is found in Technical Note 1 to ECCN 3B001.c. Wet chemical 
processing is used for a variety of purposes, from chemical removal of 
material (wet etching) to deposition of material (electroplating), to 
sample cleaning, to the creation of patterns on the surface using 
optical lithography techniques. This particular equipment is controlled 
because of its high etch selectivity ratio, which is important to IC 
fabrication at more advanced technology nodes.
    ECCN 3B001.d historically was applied to control deposition 
equipment that was then decontrolled because of technological 
advancements and foreign availability. The paragraph was reserved but 
is now being utilized again to control semiconductor wafer fabrication 
deposition equipment used today to manufacture advanced-node ICs. 
Contacts and lower interconnects are the smallest and most critical 
wiring layers delivering current to transistors, and due to continued 
geometric scaling of logic semiconductors, these metal layers now 
create a bottleneck to transistor performance. The items added to ECCN 
3B001.d.3, d.4, d.5, and d.8 include advanced fabrication equipment 
designed for metal deposition of the barrier layer, liner layer, seed 
layer, or cap layer of metal interconnects.
    ECCN 3B001.d.1 (former ECCN 3B090.a.1) is revised by adding the 
word ``designed,'' to better focus controls. This rule also revises the 
control to include ``cobalt (Co) electroplating or cobalt electroless-
plating deposition'' in response to feedback from public comments. 
Electroplating has long been used to deposit metal on substrates in the 
semiconductor industry. In advanced-node IC manufacturing, a barrier 
layer such as cobalt (Co) is necessary to block the diffusion of copper 
into the surrounding material.

[[Page 73439]]

    ECCN 3B001.d.2 (former ECCN 3B090.a.2) is revised by adding the 
phrase ``equipment designed for'' and replacing the phrase ``capable 
of'' with ``by performing,'' to better focus the controls. The phrase 
``capable of'' was replaced because BIS determined the phrase could 
unintentionally capture equipment used to produce logic ICs at legacy 
technology nodes. Using ``by performing'' more precisely controls 
equipment that is used to produce logic ICs at the advanced technology 
node. Therefore, consistent with BIS's focused approach to these 
controls and to aid with export control compliance, these controls are 
based on the designed performance of the equipment. In addition, 
periodic table symbols for elements are also added throughout this 
ECCN. Finally, BIS revised the scope of this control to provide greater 
specificity on the types of tungsten-based capabilities subject to 
control.
    ECCN 3B001.d.3 (former ECCN 3B090.a.3) is revised by replacing 
``capable of fabricating'' with ``designed to fabricate,'' for the 
reasons noted above in relation to ECCN 3B001.d.2, and by replacing 
``within'' with ``by multistep processing within a single chamber.''
    ECCN 3B001.d.3.a (former ECCN 3B090.a.3.a) is revised by replacing 
``depositing a layer using'' with ``deposition of a tungsten layer, 
using an organometallic tungsten (W) compound'' and replacing 
``between'' with ``greater than'' and ``less than.'' Subparagraph 
3B001.d.3.b (former ECCN 3B090.a.3.b) is revised by replacing 
``conducting a'' with ``a plasma process using hydrogen 
(H2),'' and replacing ``where the chemistries include'' with 
``including hydrogen and nitrogen (H2 +N2) or 
ammonia (NH3),'' and adding periodic table symbols or names 
for elements in this subparagraph.
    ECCN 3B001.d.4 contains descriptive introductory text that includes 
two common parameters that apply to all the paragraphs in ECCN 
3B001.d.4, which establishes control of SME or systems designed for 
multistep processing in multiple chambers or stations and maintaining 
high vacuum (equal to or less than 0.01 Pa) or inert environment 
between process steps. Introductory text in ECCN 3B001.d.4.a (former 
ECCN 3B090.a.4) is revised by replacing ``capable of'' with ``designed 
to fabricate,'' for the reasons noted above in relation to ECCN 
3B001.d.2. Clarifications are made to ECCN 3B001.d.4.a.1 through a.3 
(former ECCN 3B090.a.4.a, a.4.b, and a.4.c), such as adding periodic 
table symbols or chemistry formulas and replacing ``between'' with 
``greater than'' and ``less than.''
    ECCN 3B001.d.4.b (formerly ECCN 3B090.a.5) is revised by cascading 
the control text into a header and two subparagraphs for easier 
readability and clarity. A note is retained that followed what had been 
ECCN 3B090.a.5 and indicating that the control does not apply to 
equipment that is non-selective.
    ECCN 3B001.d.4.c (formerly ECCN 3B090.a.8) is revised by replacing 
``capable of'' with ``designed for,'' for the reasons noted above in 
relation to ECCN 3B001.d.2 and tightening up other text referring to 
pressure and temperature in the related items paragraphs.
    ECCN 3B001.d.4.d (formerly ECCN 3B090.a.9) controls equipment 
designed to fabricate copper interconnects, including those performing 
all the following processes: deposition of cobalt or ruthenium layer 
using an organometallic compound (see ECCN 3B001.d.4.d.1) and 
deposition of a copper layer using a physical vapor deposition 
technique (see ECCN 3B001.d.4.d.2).
    ECCN 3B001.d.5 is added to control equipment designed for plasma 
enhanced chemical vapor deposition of carbon hard masks meeting 
specified parameters. As the feature size of semiconductor devices 
decreased, a carbon hard mask film with higher etching selectivity and 
higher transparency is required for manufacturing.
    ECCN 3B001.d.6 (formerly ECCN 3B090.a.10) is revised to add 
``Atomic Layer Deposition (ALD)'' to clarify the type of equipment that 
is designed for area selective deposition of a barrier or liner using 
an organometallic compound. Atomic layer deposition (ALD) equipment has 
become a critical enabler of today's most advanced devices and the 
industry's transition to 3D architectures. On the wafer substrate, the 
ALD processes build up material directly, a fraction of a monolayer at 
a time to build the thinnest, most uniform films possible. The self-
limiting nature of the processes and the related capacity for conformal 
deposition are the basis for its importance as a 3D scaling enabler, 
such as in the fabrication of 3D DRAM, 3D NAND, and FinFET/GAAFET 
logic.
    The ECCN 3B001.d.7 (formerly ECCN 3B090.a.11) control for Atomic 
Layer Deposition (ALD) equipment is revised by replacing the words 
``capable of'' with ``designed to'' for the reasons noted above in 
relation to ECCN 3B001.d.2. BIS also revised the control to remove 
``cobalt,'' which is addressed by other revisions in ECCN 3B001.d.2. 
Further, BIS removed the phrase ``void free fill'' in favor of ``fill 
an entire interconnect'' to clarify that equipment designed only for 
ALD of a tungsten layer (rather than to fill an entire interconnect) or 
for ALD in channels of specified width) is not controlled. BIS also 
removed the phrase ``having an aspect ratio greater than 5:1.''
    ECCN 3B001.d.8 (formerly ECCN 3B090.a.7) controls certain ALD 
equipment of `work function metals,' however the parameters are 
clarified to be more specific. A technical note that defines `work 
function metal' is moved to this paragraph but remains unchanged.
    ECCN 3B001.d.9 is added to establish control of spatial ALD 
equipment having a wafer support platform that rotates around an axis 
having any of the following: a spatial plasma enhanced ALD mode of 
operation, a plasma source, or a plasma shield or means to confine the 
plasma to the plasma exposure process region. These features help 
reduce unwanted particles in the deposition process to a degree needed 
for the fabrication of advanced-node ICs.
    ECCN 3B001.d.10 is added to establish control of equipment designed 
for ALD or chemical vapor deposition (CVD) of plasma enhanced low 
fluorine tungsten films. This equipment is critical in filling voids in 
advanced-node device structures with higher and increasingly narrow 
aspect ratios, which minimizes resistance and improves performance.
    ECCN 3B001.d.11 is added to control equipment designed to deposit a 
metal layer and maintain a specified vacuum or inert gas environment, 
including equipment designed for a chemical vapor deposition or cyclic 
deposition process by performing deposition of a tungsten nitride 
layer. This equipment is needed to achieve defect-free deposition of 
tungsten, which is critical to the production of advanced-node ICs.
    ECCN 3B001.d.12 is added to establish control of equipment designed 
for depositing a metal layer and maintaining a specified vacuum or 
inert gas environment, including equipment designed for selective 
tungsten growth without a barrier and equipment designed for selective 
molybdenum growth without a barrier. This equipment enables the 
manufacture of contacts with significantly lower resistivity, which is 
important to the fabrication of advanced-node ICs.
    ECCN 3B001.d.13 is added to establish control of equipment designed 
for depositing a ruthenium (Ru) layer using an organometallic compound, 
while maintaining the wafer substrate at

[[Page 73440]]

a specified temperature. The deposition of a Ru layer under the 
specified conditions is important to achieving lower resistivity 
interconnects needed for the fabrication of advanced-node ICs.
    ECCN 3B001.d.14 is added to control deposition equipment assisted 
by remotely generated radicals enabling the fabrication of a silicon 
and carbon containing film having specified properties. This specific 
process promotes good cycle stability of the film, which is important 
in the fabrication of advanced-node ICs.
    ECCN 3B001.d.15 is added to control equipment designed for void 
free plasma enhanced deposition of a low-k dielectric layer in gaps 
between metal lines with specified parameters. A low-k CVD barrier film 
reduces the dielectric constant (k) of copper damascene structures to 
lower capacitance (power consumption), which enables fabrication of 
more advanced integrated circuits.
    ECCN 3B001.d.16 is added to control deposition equipment with 
capabilities similar to those described in new ECCN 3B001.d.14, but 
which also meets certain temperature requirements, has the capability 
to hold multiple vertically stacked wafers, and has certain injector 
configurations, as specified.
    ECCN 3B001.f.1 ``Align and expose step and repeat (direct step on 
wafer) or step and scan (scanner) equipment for wafer processing using 
photo-optical or X-ray methods'' is revised to establish controls in 
ECCN 3B001.f.1.b for equipment that have a light source wavelength 
equal to or longer than 193 nm meeting certain parameters, and adding 
two paragraphs under ECCN 3B001.f.1.b.2 to capture items with a maximum 
`dedicated chuck overlay' less than or equal to 1.50 nm, or greater 
than 1.50 nm but less than or equal to 2.4nm, respectively. The 
technical note for ECCN 3B001.f.1.b is also revised to add a definition 
for `dedicated chuck overlay.' The equipment meeting the parameters in 
ECCN 3B001.f.1.b.2.b is not eligible for de minimis treatment with one 
exception as set forth in Sec.  734.4(a)(3) of the EAR as described 
below in section C.5. This change recognizes the advancement of the 
state-of-the-art in immersion lithography equipment and the 
corresponding decrease in minimum resolvable feature (MRF) size of 
advanced-node ICs. This equipment is necessary to improve resolution by 
reducing the total edge placement error, which is a measure of the 
accuracy between pattern overlays on the same exposure mask level. The 
definition for ``Extreme Ultraviolet'' (``EUV'') is moved from the 
technical note located after ECCN 3B001.j.2 to Sec.  772.1 as an EAR 
defined term, because the term is used in ECCNs 3B001, 3B002, and 
3D003. The addition of this term to Sec.  772.1 is described below in 
section C.12.
    ECCN 3B001.k is added to establish controls on equipment designed 
for ion beam deposition or physical vapor deposition of multi-layer 
reflector for ``EUV'' masks. ECCN 3B001.l is added to establish 
controls on ``EUV'' pellicles and ECCN 3B001.m is added to establish 
controls on equipment for manufacturing ``EUV'' pellicles. Masks, 
reticles, and associated pellicles are critical components for EUV 
lithography, which itself enables fabrication of very small feature 
sizes used at more advanced production nodes. Masks for EUV lithography 
have many features that uniquely suit them for EUV lithography, e.g., 
they have a low thermal expansion low defect glass blank and operate in 
the reflection mode, whereas masks for 193 nm and 248 nm lithography 
technology operate in the transmission mode.
    ECCN 3B001.n is added to establish controls on equipment designed 
for coating, depositing, baking, or developing photoresist formulated 
for ``EUV'' lithography, which as noted above is critical for 
production of advanced-node ICs.
    ECCN 3B001.o is added to establish controls of semiconductor wafer 
fabrication annealing equipment with specified parameters. In the case 
of silicon wafers, annealing is often used to improve the surface 
roughness and crystal quality of the wafer. It can also be used to 
remove defects and impurities from the surface of the wafer. This 
removal is even more critical in the production of wafers used to 
fabricate advanced-node ICs given their smaller feature sizes.
    ECCN 3B001.p is added to establish control of three types of 
semiconductor wafer fabrication cleaning and removal equipment.--
Frequent removal of contaminants and wafer cleansing is critical during 
the manufacture of advanced-node integrated circuits. At advanced 
technology nodes any contaminant, unwanted particles or debris, in the 
nanometer range, can easily cause short circuits that would disable an 
IC.
    ECCN 3B001.p.1 controls equipment designed for removing polymeric 
residue and copper oxide film and enabling deposition of copper metal 
in a vacuum (equal to or less than 0.01 Pa) environment. BIS notes that 
this control does not capture deposition equipment that is not 
elsewhere specified, but which may also have the capability described 
in the control.
    ECCN 3B001.p.2 controls single wafer wet cleaning equipment with 
surface modification drying. BIS notes that this control is not 
intended to capture planarization equipment that may incorporate 
``cleaning'' and ``drying'' steps as part of its overall process. 
Planarization is a process used in semiconductor manufacturing to 
polish wafers, rather than to clean wafers.
    ECCN 3B001.p.3 controls equipment designed for dry surface oxide 
removal preclean or dry surface decontamination. As with ECCN 
3B001.p.1, BIS notes that this control does not capture deposition 
equipment not elsewhere specified, but which may also have the 
capability described in the control. However, BIS notes that any 
components or attached chambers providing such capability would be 
controlled when exported, reexported, or transferred (in-country) as a 
separate item.
2. Revisions to ECCN 3B002
    The heading to ECCN 3B002 is revised by adding ``or inspection'' 
before equipment and ``or inspecting'' after testing because inspection 
equipment is added to this ECCN. License Exception LVS eligibility is 
revised to remove eligibility for semiconductor manufacturing equipment 
specified in ECCN 3B002.b and c. Only license exceptions found in Sec.  
740.2(a)(9) of the EAR may be used for specified semiconductor 
manufacturing equipment such as this. Former paragraph 3B002.c is 
redesignated as paragraph 3B002.b and new paragraph 3B002.c is added to 
establish control of inspection equipment designed for ``EUV'' mask 
blanks or ``EUV'' patterned masks. Semiconductor inspection tools 
increase production throughputs by optimizing processes and improving 
quality and yields, and specialized versions of these tools are 
required for inspection at advanced technology nodes enabled by EUV, 
and therefore warrant NS and RS controls for EUV (high-end) masks. The 
definition for ``Extreme Ultraviolet'' (``EUV'') that this rule adds to 
Sec.  772.1, as described below in section C.12, applies to that term 
as it is used in ECCN 3B002.c.
3. Removal of ECCN 3B090 and Conforming Changes
    BIS added ECCN 3B090 to the CCL in the October 7 IFR. This rule 
removes ECCN 3B090 because it was determined that controls on SME 
should be placed with similar equipment specified in previously 
existing ECCNs, e.g., 3B001, for ease of compliance, enforcement, and 
because BIS anticipates that these items will be the subject of future 
formal

[[Page 73441]]

multilateral controls, as discussed above.
    Licenses issued by BIS for equipment that was classified under ECCN 
3B090, but is now under ECCN 3B001, remain valid until expiration, 
unless suspended or revoked. For export clearance purposes for licenses 
involving ECCN 3B090 items, exporters must use the new 3B001, 
consistent with Sec.  750.7(c)(1)(viii). This concept also applies to 
all other ECCN redesignations that occur as a result of this SME IFR. 
Exporters must list the new ECCN classification on any export clearance 
documentation filed after the effective date of this rule.
4. Revisions to ECCNs 3D001, 3D002, 3D003, and 3E001
    The license requirement tables of ECCNs 3D001, 3D002, and 3E001 are 
revised following the same pattern as the table revisions for ECCNs 
3B001 and 3B002, described above. For all three ECCNs, new NS and RS 
license requirements rows are added for software and technology related 
to newly added SME in ECCN 3B001.a.4, c, d, f.1.b and k to p when 
destined to or within Macau or destinations specified in Country Group 
D:5 of supplement no. 1 to part 740 of the EAR. The related changes to 
Sec. Sec.  742.4(a)(4) and 742.6(a)(6) of the EAR are discussed in 
section C.8 and C.9, respectively. All items in these ECCNs, including 
these newly listed SME, are also controlled for AT reasons and subject 
to an AT:1 license requirement. The License Requirement table is 
revised to identify these reasons for control.
    Because of the addition of RS controls, in ECCNs 3D001 and 3D002, 
License Exception TSR eligibility is revised to include ``N/A for RS,'' 
as TSR eligibility is for items that require a license for NS reasons 
only. For ECCN 3E001, TSR eligibility is also revised for the same 
reasons, but adds N/A for NP and RS.
    In addition to the changes described above, the heading of ECCN 
3D002 is revised by expanding the scope to include newly added SME in 
ECCN 3B001.k to p. In addition, the reporting requirement is removed, 
as ECCN 3D002 does not appear in supplement no. 2 to part 774--
Sensitive List.
    The heading of ECCN 3D003 is revised by adding double quotes around 
the newly defined term ``EUV,'' because that term is defined now 
defined in Sec.  772.1 of the EAR.
    This rule also makes an additional clarification to ECCN 3E001. In 
ECCN 3E001, this rule revises the Regional Stability control in the 
License Requirements section Control(s) column to remove the phrase 
``or ``software'' specified by ECCN 3D001 (for ECCN 3A090 or 3B090 
commodities)'' because it is no longer needed. This rule is removing 
technology controls for ECCN 3D001 software (for ECCNs 3A090 and 3B090 
commodities) because the technology related to software is simply 
source code, which is generally classified as software, so there is no 
need for a separate technology control under ECCN 3E001 for ECCN 3D001 
software.
    Only license exceptions found in Sec.  740.2(a)(9) of the EAR may 
be used for technology or software for specified semiconductor 
manufacturing equipment.
5. Addition of Sec.  734.4(a)(3) 0% De Minimis Rule for ECCN 
3B001.f.1.b.2.b Items
    This rule revises Sec.  734.4 by adding a new paragraph (a)(3) to 
specify that there is no de minimis level for lithography equipment and 
``specially designed'' items therefor meeting the parameters in ECCN 
3B001.f.1.b.2.b when destined for use in the ``development'' or 
``production'' of ``advanced-node integrated circuits,'' except when 
the country from which the foreign-made item was originally exported or 
reexported has the item listed on its export control list. In other 
words, if the other country maintains an equivalent export control for 
equipment meeting the parameters of ECCN 3B001.f.1.b.2.b, BIS does not 
need to impose additional controls on the export from abroad, or the 
reexport or transfer (in-country) of these foreign-made items. BIS is 
adding a footnote with information concerning any countries that 
maintain an equivalent export control.
Retention of BIS Jurisdiction
    For exports from abroad from any other country, and subsequent 
reexports or transfers to or within any other country of items that 
were exported from abroad from a country that does not maintain 
equivalent controls, BIS retains jurisdiction over such foreign-made 
equipment to protect U.S. national security and foreign policy 
interests.
6. Revisions to the Temporary General License in Supplement no. 1 to 
Part 736--General Orders
    Effective November 17, 2023, this rule revises paragraph (d) of 
(General Order No. 4) under supplement no. 1 to part 736 by removing 
the October 7 IFR TGL and adding a new TGL.
    This SME IFR adds a new TGL under paragraph (d)(1) for companies 
headquartered in the United States or a destination specified in 
Country Group A:5 or A:6 that send CCL items to manufacturing 
facilities in a Country Group D:5 country or Macau for the 
``development'' or ``production'' of ``parts,'' ``components,'' or 
``equipment'' of certain Category 3B ECCNs specified in Sec.  
744.23(a)(4). The TGL overcomes the license requirements described in 
Sec.  744.23(a)(4) (former Sec.  744.23(a)(2)(v)) when (1) the items 
exported, reexported, or transferred (in-country) are subject to the 
EAR, specified on the CCL, and controlled only for AT reasons, and (2) 
the items are exported, reexported, or transferred (in-country) at the 
direction of a company that is headquartered in the United States or a 
destination specified in Country Groups A:5 or A:6, and not majority-
owned by a company headquartered in either Macau or a destination 
specified in Country Group D:5. The purpose of this TGL is to provide 
SME producers in the United States and Country Groups A:5 and A:6 
countries additional time to identify alternative sources of supply 
outside of arms-embargoed countries, or to acquire individually 
validated licenses to continue manufacturing `front-end integrated 
circuit ``production'' equipment' and related ``parts'' and 
``components'' in such countries. In keeping with that goal, this TGL 
is valid from November 17, 2023, through December 31, 2025.
    As noted below in section C.11, the overarching purpose of Sec.  
744.23(a)(4) (former Sec.  744.23(a)(2)(v)) is to inhibit the 
indigenization of `front-end integrated circuit ``production'' 
equipment' and related ``parts'' and ``components'' that would render 
the end-use controls in Sec.  744.23(a)(2) obsolete. BIS has narrowed 
the scope of Sec.  744.23(a)(4) to focus on the types of equipment 
(i.e., front-end) that are most likely relevant to the ``production'' 
of ``advanced-node integrated circuits,'' which may include node-
agnostic tools specified in ECCNs controlled for only AT reasons. As 
noted in section C.11, BIS welcomes comment on whether there are ECCNs 
that should be excluded from the end-use scope because they are 
exclusively used in the ``production'' of legacy-node integrated 
circuits.
    In keeping with that goal, new paragraph (d)(4) (End-use and end-
user restrictions) states that the TGL cannot be used for the 
indigenous ``development'' or ``production'' of Category 3B tools in 
either Macau or a destination specified in Country Group D:5, i.e., 
where the ``part,'' ``component,'' or ``equipment'' is ``developed'' or 
``produced'' at the

[[Page 73442]]

direction of an entity that is headquartered in either Macau or a 
destination specified in Country Group D:5. Paragraph (d)(4)(i) also 
specifies that the TGL does not overcome the license requirements of 
Sec.  744.11 or Sec.  744.21 of the EAR when an entity listed in 
supplements no. 4 or 7 to part 744 is a party to the transaction as 
described in Sec.  748.5(c) through (f) of the EAR, or when there is 
knowledge of any other prohibited end use or end user.
    Lastly, new paragraph (d)(5) (Recordkeeping requirements) specifies 
that all exports, reexports, transfers (in-country), and exports from 
abroad shipped under the authorization of the TGL are subject to the 
recordkeeping requirements of part 762. Paragraph (d)(5) states that 
the records subject to this recordkeeping requirement include but are 
not limited to directives to the parties that are eligible to use this 
TGL and a list of the parties that have received directives. Each party 
that issues or acts upon a directive is responsible for keeping a 
record of that directive.
7. Revisions to Sec.  740.2 License Exception Restrictions
    This rule also restructures Sec.  740.2(a)(9) by addressing SME in 
paragraph (a)(9)(i) and advanced computing and supercomputer items in 
paragraph (a)(9)(ii). This rule also revises Sec.  740.2(a)(9) by 
replacing references to 3B090 with references to new ECCNs 3B001.a.4, 
c, d, f.1.b, k to p, 3B002.b and c, or associated software and 
technology in ECCN 3D001, 3D002, 3D003, or 3E001. As a result, these 
items remain ineligible for all license exceptions other than License 
Exception GOV. This SME IFR expands the availability of License 
Exception GOV for both SME and advanced computing and supercomputer 
items to all of the United States Government under Sec.  740.11(b), 
consistent with policy that GOV should be available for U.S. Government 
use or for those acting for or on behalf of the U.S. Government.
    In addition, for ECCNs 3A090 and 4A090 items, as requested in 
public comments on the October 7 IFR, this SME IFR also amends Sec.  
740.2(a)(9)(ii) to add eligibility for License Exception TMP under 
Sec.  740.9(a)(6), so that eligible companies may temporarily send 
foreign-produced advanced computing items for inspection, test, 
calibration, and repair to Macau or destinations specified in Country 
Group D:5, as well as transfer within those destinations for 
inspection, test, calibration, and repair. Not including License 
Exception TMP for Sec.  740.9(a)(6) in the October 7 IFR was an 
inadvertent oversight, which as the commenters correctly noted would 
undermine the usefulness of License Exception RPL, which was included 
in the October 7 IFR for these items.
8. Addition and Reformatting of Sec.  742.4 National Security Controls
    This rule amends Sec.  742.4 by reformatting paragraph (a) for 
easier navigation and readability, as well adding a new paragraph 
(b)(2) and paragraph (d) for license exception guidance. Specifically, 
a sentence is added to the introductory text of paragraph (a) to 
explain the basis for most of the items controlled for National 
Security reasons on the CCL. Paragraph (a) is now cascaded into 
separate paragraphs for ease of reading and navigation. Paragraph 
(a)(1) describes NS:1 license requirements, paragraph (a)(2) describes 
NS:2 license requirements, paragraph (a)(3) describes NS-related 
license requirements for ECCN 6A003.b.4.b, and paragraph (a)(4) is 
added to describe NS related license requirements for certain SME and 
associated software and technology, which is for the newly added SME in 
ECCNs 3B001 and 3B002, associated software in ECCNs 3D001 and 3D002, 
and associated technology in 3E001. A license is required for exports 
and reexports to either Macau or destinations specified in Country 
Group D:5 of commodities specified in ECCNs 3B001.a.4, c, d, f.1.b, k 
to p, and 3B002.b and c and their associated software and technology.
    Paragraph (b) is amended by adding an introductory sentence that 
includes former paragraph (b)(3) and explains that if a license 
application meets the criteria of more than one of the paragraphs in 
(b), then the most restrictive license policy will be applied. This 
rule also adds subject headings to each license policy paragraph to 
assist with navigation within paragraph (b). This rule moves the text 
from paragraph (b)(2) to the end of paragraph (b)(1)(i), because this 
further explains license review policy for exports and reexports to 
destinations in Country Group D:1. The license policy in former 
paragraph (b)(1)(iii) for 9x515 to China and destinations in Country 
Group E:1 is combined with the license policy for ``600 series'' items 
in former paragraph (b)(1)(ii), because these destinations are also in 
Country Group D:5 and the corresponding licensing policy, consistent 
with Sec.  126.1 of the International Traffic in Arms Regulations 
(ITAR) (22 CFR chapter I, subchapter M) for such destinations, would be 
a policy of denial. The combined license policy is now in paragraph 
(b)(1)(ii).
    This rule adds a new paragraph (b)(2) indicating license 
applications will be reviewed consistent with license review policies 
in Sec.  744.23(d) of the EAR, except applications will be reviewed on 
a case-by-case basis if no license would be required under part 744 of 
the EAR. License applications for items specified in paragraph (a)(4) 
will be reviewed consistent with license review policies in Sec.  
744.23(d) of the EAR, except applications will be reviewed on a case-
by-case basis if no license would be required under part 744 of the 
EAR.
    Paragraph (c), regarding the applicability of contract sanctity, 
has been revised to note that contract sanctity will be available as a 
factor for consideration for license applications involving the new SME 
items identified in paragraph (a)(4) of this section.
    The previously reserved paragraph (d) is now a paragraph for 
license exceptions guidance. This paragraph is added to provide 
references to specific license exceptions that are for national 
security-controlled items, as well as other useful license exceptions 
for national security items. It also cross-references the restrictions 
that apply to all license exceptions in Sec.  740.2 of the EAR.
9. Revision of Sec.  742.6 Regional Stability
    Section 742.6(a)(6)(i) is revised to remove references to ECCN 
3B090 and associated software and technology to conform to the removal 
of that ECCN from the CCL. See section C.3 of this rule for the 
description of the removal of 3B090 and addition of items to 3B001, 
3B002, and associated software and technology ECCNs. This SME IFR 
separates from paragraph (a)(6)(i) sentences about exports from abroad 
from China or Macau and adds them to a new paragraph (a)(6)(ii). In 
addition, the deemed export/reexport paragraph in former paragraph 
(a)(6)(ii) is now redesignated as paragraph (a)(6)(iii).
    BIS specifically seeks public comment on the applicability of 
deemed exports and deemed reexports in paragraph (a)(6)(iii). 
Commenters are asked to provide feedback regarding the impact of this 
provision on their business and operations, in particular, what if any 
impact companies would experience if the deemed export and deemed 
reexport provision was removed and a license were to be required. 
Commenters are also asked to provide guidance on what if any practices 
are utilized to safeguard technology and intellectual property and the 
role of foreign person employees in obtaining and maintaining U.S. 
technology leadership.
    Lastly, this rule revises the license review policy under paragraph 
(b)(10) to

[[Page 73443]]

harmonize the destination scope to Macau and destinations specified in 
Country Group D:5 and state that the license review will be consistent 
with Sec.  744.23(d) of the EAR, except applications will be reviewed 
on a case-by-case basis if no license would be required under part 744 
of the EAR.
10. Revision of Sec.  744.6 Activities of ``U.S. Persons''
    Paragraph (c) is restructured by consolidating the nine former 
paragraphs (c)(2)(i) through (ix), which included redundant text, into 
three paragraphs (c)(2)(i) through (iii). Paragraph (c)(2) now captures 
the types of prohibited activities, i.e., shipping, transmitting, or 
transferring (in-country), applicable to the destinations and end uses 
described in three paragraphs (c)(2)(i) through (iii). A commenter 
asked whether knowledge of a violation is a requirement to trigger the 
license requirements under Sec.  744.6, and in response to this 
comment, BIS is clarifying this by adding ``if you know your export, 
reexport, or transfer (in-country) meets any of the specified 
activities described in paragraphs (c)(2)(i) through (iii) of this 
section, then'' to the paragraph (c)(2) introductory text to make this 
point.
    Other paragraph specific changes are described below.
    a. Revisions related to former paragraphs (c)(2)(i) through (iii) 
regarding semiconductor ``development'' and ``production'' activities 
and related exclusions in paragraph (d).
    Section 744.6(c)(2)(i) and (ii) (former paragraphs (c)(2)(i) 
through (vi)) are revised to clarify the types of end uses captured by 
the controls, as well as the types of ``facilities'' where a prohibited 
end use must occur. First, the phrase ``that fabricates'' is replaced 
with ``where ``production'' . . . occurs.'' Second, the phrase 
``semiconductor fabrication'' is removed and therefore no longer 
qualifies the term ``facility.'' BIS opted to leverage the existing 
defined term ``production'' rather than create a new defined term for 
``fabrication.'' These changes are intended to retain BIS's focus on 
specific ``facilities'' (i.e., buildings) at locations that may 
maintain multiple production lines at different production technology 
nodes, not all of which may ``produce'' ``advanced-node integrated 
circuits.'' However, the changes also allow more flexibility in 
identifying relevant facilities where ``production'' may occur beyond a 
fabrication facility, which some in industry interpreted narrowly to 
encompass only a clean room or production floor. In contrast to the 
term ``fabrication,'' the term ``production'' better captures 
facilities where important late-stage product engineering or early-
stage manufacturing steps (among others) may occur, which aligns with 
BIS's intended focus. In addition, because the controls still capture 
``development'' activities that may occur at the same ``facility'' 
where ``production'' of ``advanced-integrated circuits'' occur, this 
change also better captures ``development'' and product engineering 
activities at research and development (R&D) fabrication ``facilities'' 
that may not engage in volume manufacturing of integrated circuits. On 
the other hand, BIS also clarifies that a ``facility'' where only 
``development'' activities occur would not fall within the scope of 
controls, primarily because this could over-capture ``facilities'' 
engaged exclusively in design or other forms of ``development'' of 
consumer items (e.g., smartphone ICs) that will be ``produced'' outside 
of China or at approved ``facilities'' in China and therefore do not 
necessarily warrant control. BIS welcomes comments on the implications 
of these changes relative to the objectives and considerations stated 
throughout this IFR.
    To enhance readability and simplify the structure of the controls 
under paragraphs (c)(2)(i) and (ii) (former paragraphs (c)(2)(i) 
through (vi)), BIS has moved and clarified the criteria for three types 
of ``advanced-node integrated circuits'' to a new definition in Sec.  
772.1 of the EAR and has added a heading to each paragraph. The term 
servicing in Sec.  744.6(c) is revised to add the term installation, so 
it is clear that the prohibition under these two paragraphs on 
servicing also extends to installing any item not subject to the EAR 
that you know will be used in the ``development'' or ``production'' of 
``advanced-node ICs'' or specified SME.
    b. Revisions to former paragraphs (c)(2)(vii) through (ix) related 
to certain SME not subject to the EAR.
    Section 744.6(c)(2)(iii) is revised to remove references to ECCN 
3B090 and associated software and technology to conform with the 
removal of that ECCN from the CCL. See above for the description of the 
removal of ECCN 3B090 and addition of items to ECCNs 3B001, 3B002, and 
associated software and technology ECCNs, found in sections C.3, C.1, 
and C.2, respectively. The country scope is changed from ``PRC and 
Macau'' to ``either Macau or a destination specified in Country Group 
D:5,'' which is explained in section C. Specifically, paragraph 
(c)(2)(iii) of Sec.  744.6 is revised to add references to ECCN 
3B001.a.4, c, d, f.1.b, k to p; 3B002.b and c; 3D001 (for 3B001.a.4, c, 
d, f.1.b, k to p, 3B002.b and c); 3D002 (for 3B001 a.4, c, d, f.1.b, k 
to p, 3B002.b and c); or 3E001 (for 3B001.a.4, c, d, f.1.b, k to p, 
3B002.b and c).
    c. Revisions related to paragraph (d) license exceptions and 
exclusions.
    Section 744.6(d) is amended by revising the heading from 
``exceptions'' to ``exceptions and exclusions,'' as well as adding 
headings to the paragraphs in (d) for easier readability and 
navigation. This rule also moves the text of paragraph (d)(1) to the 
introductory paragraph, where it continues to state that paragraphs 
(b)(1) through (4) are not eligible for license exceptions. The 
paragraph is also amended to indicate that no license exceptions are 
available for Sec.  744.6(c)(2). The license exception that was 
formerly in paragraph (d)(2) has been converted into an exclusion in 
paragraph (d)(2). Paragraph (d)(1) is now reserved. In addition, this 
rule differentiates between exclusions from the license requirements of 
this section and license exceptions found in part 740 of the EAR.
    Also consistent with revisions to related sections of Sec.  744.23, 
BIS has added an exclusion under paragraph (d)(3) to limit the scope of 
``production'' steps captured by paragraphs (c)(2)(i) and (ii). In line 
with BIS's response in its Jan. 25, 2023 FAQ II.A1, this exclusion 
excludes ``back-end'' production steps, such as assembly, test, or 
packaging steps that do not alter the technology level of an integrated 
circuit.
    Additionally, this rule adds an exclusion that applies to 
paragraphs (c)(2)(i) through (iii) of this section in paragraph (d)(4) 
for natural ``U.S. persons'' employed or working on behalf of a company 
headquartered in the United States or a destination specified in 
Country Group A:5 or A:6 and not majority-owned by an entity that is 
headquartered in Macau or a destination specified in Country Group D:5. 
This exclusion is intended to ease the compliance burden and 
corresponding disincentive to employ U.S. persons in activities for 
which governments of closely allied destinations maintain or may 
establish appropriate controls. This rule also adds a new Note to 
paragraph (d)(4) to provide additional context on when activities of 
``U.S. persons'' are excluded, including providing guidance on how 
these criteria apply to ``U.S. persons'' working as freelancers for 
companies headquartered in the United States or in a destination 
specified in Country Group A:5 or A:6, on behalf of a company not 
headquartered in the United States or in a destination

[[Page 73444]]

specified in Country Group A:5 or A:6, or some combination of these 
scenarios.
    Finally, this rule adds an exclusion that applies to paragraph 
(c)(2)(iii) of this section in paragraph (d)(5) for servicing 
(including installation) activities unless such activities occur at a 
facility where ``production'' of ``advanced-node integrated circuits'' 
occurs. This will exclude servicing (including installation) of items 
specified in the ECCNs listed by paragraph (c)(2)(iii), when in a 
facility that does not produce ``advanced-node integrated circuits'' to 
avoid restricting servicing (including installation) at legacy-node 
facilities. This type of provision is included to ensure the controls 
remain focused on transactions and activities of national security 
concern.
    d. Revisions related to paragraph (e) license review standards.
    Section 744.6(e) is amended by revising paragraph (e)(3) to focus 
on countries of concern and provide an additional exclusion for the 
presumption of denial policy. BIS will review applications with a 
presumption of denial when they include destinations in Macau and 
destinations in Country Group D:5, except when there is a foreign-made 
item available that is not subject to the EAR and has the same function 
as an item subject to the EAR, which will be reviewed with a 
presumption of approval. All other applications will be considered on a 
case-by-case basis taking into account factors including technology 
level, customers, and compliance plans.
11. Revisions of Sec.  744.23 ``Supercomputer,'' ``Advanced-Node 
Integrated Circuits,'' and Semiconductor Manufacturing Equipment End 
Use Controls
    a. General Revisions and Context for These Changes.
    BIS received comments from the public to simplify the format of 
Sec.  744.23 by combining the product scope paragraphs with the end-use 
scope paragraphs. BIS agrees and has done this. Here is a table to help 
the public find the new locations of paragraphs within Sec.  744.23.

Sec.   744.23 ``Supercomputer,'' ``Advanced-Node Integrated Circuit,'' and Semiconductor Manufacturing Equipment
                                                End-Use Controls
----------------------------------------------------------------------------------------------------------------
              Topic                               Prior to this rule                        In this rule
----------------------------------------------------------------------------------------------------------------
``Supercomputer''................  (a)(1)(i) and (ii).............................  (a)(1)(i).
                                   (a)(2)(i)......................................  (a)(1)(ii)(A).
                                   (a)(2)(ii).....................................  (a)(1)(ii)(B).
``Advanced-node ICs''............  (a)(1)(iii) and (a)(2)(iii)....................  (a)(2)(i).
                                   (a)(1)(iv) and (a)(2)(iv)......................  (a)(2)(ii).
Reserved.........................  N/A............................................  (a)(3).
Semiconductor Manufacturing        (a)(1)(v) and (a)(2)(v)........................  (a)(4).
 Equipment (SME).
Exclusions.......................  None...........................................  (a)(5).
Is informed by BIS...............  (b)............................................  (b).
License Exceptions...............  (c)............................................  (c).
License review standards.........  (d)............................................  (d).
----------------------------------------------------------------------------------------------------------------

    The introductory text of paragraph (a) in Sec.  744.23 is revised 
to reference the new exclusions in paragraph (a)(5) that apply to the 
license requirements of this section. Paragraphs (a)(1) and (2) are 
combined under three topical paragraphs: (a)(1) ``supercomputers,'' 
(a)(2) ``advanced-node ICs,'' and (a)(4) SME. This rule adds a new 
paragraph (a)(5) for an exclusion to the license requirements. 
Paragraphs (b) and (d) have not been amended. The country scope is 
changed from ``China and Macau'' to ``Macau or a destination specified 
in Country Group D:5'' throughout this section for reasons explained in 
section C of the preamble of this rule.
    Paragraph (a)(2)(ii) (former paragraph (a)(1)(iv)) is also revised 
to replace the words ``and classified'' with ``specified,'' so that the 
public does not incorrectly conclude that one must formally submit a 
classification request to have the item classified by BIS to make a 
license requirement determination under this provision.
    b. Revisions related to paragraphs (a)(2)(i) and (ii) (former 
paragraphs (a)(2)(iii) and (iv)) regarding the ``development'' and 
``production'' of ICs.
    Consistent with revisions described above to Sec.  744.6, the 
phrase ``that fabricates'' is replaced with ``where ``production'' . . 
. occurs,'' and the phrase ``semiconductor fabrication'' is removed and 
therefore no longer qualifies the term ``facility.'' BIS opted to 
leverage the existing defined term ``production'' rather than create a 
new defined term for ``fabrication.'' These changes are intended to 
retain BIS's focus on specific ``facilities'' (i.e., buildings) at 
locations that may maintain multiple production lines at different 
production technology nodes, not all of which may ``produce'' 
``advanced-node integrated circuits.'' However, the changes also allow 
more flexibility in identifying relevant facilities where 
``production'' may occur beyond a fabrication facility. For example, 
the term ``production'' better captures facilities where important 
late-stage product engineering or early-stage manufacturing steps 
(among others) may occur. In addition, because the controls still 
capture ``development'' activities that may occur at the same 
``facility'' where ``advanced-integrated circuits'' are ``produced,'' 
this change also better captures ``development'' and product 
engineering activities at R&D fabrication ``facilities'' that may not 
engage in volume manufacturing of integrated circuits. On the other 
hand, BIS also clarifies that a ``facility'' where only ``development'' 
activities occur would not fall within the scope of controls, primarily 
because this could over-capture ``facilities'' engaged exclusively in 
``design'' or other forms of ``development'' of consumer items (e.g., 
smartphone ICs). BIS welcomes comments on the implications of these 
changes relative to the objectives and considerations stated throughout 
this IFR.
    In addition, BIS has added an exclusion under paragraph (a)(5) to 
limit the scope of ``production'' steps captured by paragraphs (a)(2) 
(former paragraphs (a)(2)(iii) and (iv)). As relayed in BIS's Jan. 25, 
2023, FAQ II.A.1, for purposes of Sec.  744.23(a)(2), the term 
``production'' does not apply to back-end steps, such as assembly, 
test, or packaging that do not alter the semiconductor technology 
level. If there is a question at the time of export, reexport, or 
transfer (in-country) about

[[Page 73445]]

whether a manufacturing stage is ``back-end'' or whether a back-end 
activity ``alter[s] the semiconductor technology level,'' you may 
submit an advisory opinion request to BIS pursuant to Sec.  748.3(c) 
for clarification.
    Further, to enhance readability and simplify the structure of the 
controls under paragraphs (a)(2) (former paragraphs (a)(2)(iii) and 
(iv)), BIS has moved and clarified the criteria for three types of 
``advanced-node integrated circuits'' to a new definition in Sec.  
772.1 of the EAR.
    Paragraphs (a)(1) through (4) are revised to add paragraph headings 
to make it easier for exporters, reexporters, and transferors to 
identify the scope of each of these paragraphs.
    c. Revisions related to paragraph (a)(4)(former paragraph 
(a)(2)(v)) regarding the ``development'' or ``production'' of SME.
    As noted above in response to public comments, BIS has narrowed the 
product scope of Sec.  744.23(a)(4) to items subject to the EAR and 
specified on the CCL in supplement no. 1 to part 774 of the EAR, and it 
has narrowed the end-use scope of Sec.  744.23(a)(4) to `front-end 
integrated circuit ``production'' equipment' and other items specified 
in 3B ECCNs. The term `front-end integrated circuit ``production'' 
equipment' does not include equipment used exclusively in back-end 
steps or other applications (e.g., outside of integrated circuit 
``production'') that do not alter the integrated circuit technology 
level. BIS welcomes comments on this revision, including identification 
of any specific items that warrant exclusion from the product scope or 
end use scope, e.g., because they are exclusively used in the 
production of integrated circuits at legacy production technology 
nodes.
    In addition, BIS has revised the scope of paragraph (a)(4) to 
exclude masks and other items specified in ECCNs 3B001.g, 3B001.h, 
3B001.j, and 3B991.b.2. This exclusion will allow the export, reexport, 
and transfer (in-country) of items subject to the EAR destined for use 
in the ``development'' or ``production'' in either Macau and 
destinations specified in Country Group D:5 of masks and reticles in 
the specified ECCNs for fabricating ICs that are not ``advanced-node 
integrated circuits.'' Any item subject to the EAR, including one 
specified in these ECCNs, that is destined for use in the 
``development'' or ``production'' in either Macau or destinations 
specified in Country Group D:5 of ``advanced-node integrated 
circuits,'' must still be assessed against the license requirements in 
Sec.  744.23(a)(2).
    ECCN 3B090 is also removed from the list of ECCNs in paragraph 
(a)(4), because the equipment controlled in that ECCN has been moved to 
ECCN 3B001, which is already listed in this paragraph.
    d. Exclusion
    BIS added an exclusion to Sec.  744.23(a)(5) to limit the scope of 
``production'' steps captured by paragraphs (a)(2)(i) and (ii). In line 
with BIS's response in its Jan. 25, 2023 FAQ II.A1, this exclusion 
excludes back-end production steps, such as assembly, test, or 
packaging steps that do not alter the technology level of an integrated 
circuit.
    e. License exception
    As noted above, BIS has narrowed the product scope of Sec.  
744.23(a)(4) (former Sec.  744.23(a)(2)(v)) to items subject to the EAR 
and specified on the CCL. BIS considered adding license exception 
availability for License Exceptions TSU, RPL, and TMP for updates and 
repairs for SME equipment. However, we came to the conclusion that 
there isn't a need for License Exceptions TSU for paragraphs (a) 
(Operation technology and software) and (c) (Software updates) to allow 
for updates of items that were legally exported, reexported, or 
transferred (in-country) or License Exception TMP or RPL for repairs, 
because paragraph (a)(4) only captures ``development'' and 
``production'' of SME. However, we welcome comments providing differing 
conclusions on this topic.
    f. License review standards
    There is a presumption of denial for Macau and destinations in 
Country Group D:5 of supplement no. 1 to part 740, with two exceptions. 
BIS is expanding the exception that could only be applied to one 
paragraph (a)(2)(i) (former paragraph (a)(2)(iii)) for ``end users in 
China or Macau that are headquartered in the United States or in a 
Country Group A:5 or A:6 country'' by allowing the exception to be 
applied to all paragraphs for end users in either Macau or a 
destination in Country Group D:5 that are headquartered in the United 
States or in a Country Group A:5 or A:6 country that are not majority-
owned by an entity headquartered in either Macau or a destination 
specified in Country Group D:5. In addition, BIS is adding another 
exception that may be applied to all the paragraphs when there is a 
foreign-made item available that is not subject to the EAR and has the 
same function as the item subject to the EAR. Applications that meet 
either of these exceptions will be reviewed with a presumption of 
approval.
12. Addition to Sec.  772.1 Definitions of Terms as Used in the EAR
    Section 772.1 is revised to add a definition for the term ``extreme 
ultraviolet'' (``EUV''). To specify that this term means 
electromagnetic spectrum wavelengths greater than 5 nm and less than 
124 nm. This rule adds this new defined term to Sec.  772.1 because the 
term is used in ECCNs 3B001, 3B002 and 3D003.
    Section 772.1 is also revised to add a definition for the term 
``advanced-node integrated circuit.'' BIS added this definition to 
simplify the regulatory text in several places in Sec. Sec.  744.6 and 
744.23 that previously described the criteria for ``advanced'' ICs. As 
noted above under section C.11, this definition also now includes notes 
clarifying the meaning of ``production technology node'' for two types 
of ``advanced-node integrated circuits.''

Export Control Reform Act of 2018

    On August 13, 2018, the President signed into law the John S. 
McCain National Defense Authorization Act for Fiscal Year 2019, which 
included the ECRA, 50 U.S.C. 4801-4852. ECRA, as amended, provides the 
legal basis for BIS's principal authorities and serves as the authority 
under which BIS issues this rule.

Rulemaking Requirements

    1. Executive Orders 12866, 13563, and 14094 direct agencies to 
assess all costs and benefits of available regulatory alternatives and, 
if regulation is necessary, to select regulatory approaches that 
maximize net benefits (including potential economic, environmental, 
public health and safety effects and distributive impacts and equity). 
Executive Order 13563 emphasizes the importance of quantifying both 
costs and benefits and of reducing costs, harmonizing rules, and 
promoting flexibility.
    This interim final rule has been designated a ``significant 
regulatory action'' under Executive Order 12866. This rule does not 
contain policies with federalism implications as that term is defined 
under Executive Order 13132.
    2. Notwithstanding any other provision of law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et 
seq.) (PRA), unless that collection of information displays a currently 
valid Office of Management and Budget (OMB) Control Number. Although 
this rule makes important changes to the

[[Page 73446]]

EAR for items controlled for national security reasons, BIS believes 
that the added exclusions and narrowing of scope on key paragraphs 
outweigh the expansion in country scope, so that the overall burden 
will decrease. Therefore, the burdens and costs associated with the 
following information collections due to this rule are within the 
approved burden estimates for the following:
     0694-0088, ``Simplified Network Application Processing 
System,'' which carries a burden- hour estimate of 29.6 minutes for a 
manual or electronic submission. The burden associated with Supplement 
no. 1 to part 736, General order 4, paragraph (d)(5) Temporary General 
License burden for recordkeeping is accounted for under 0694-0088 and 
is minimal due to the limited scope of those required to keep records 
(11 companies). The recordkeeping does not go beyond that which the 
exporter is already under obligation to keep pursuant to part 762 
recordkeeping provisions of the EAR. There is a sunset clause on this 
requirement effective August 1, 2024, when this provision will be 
removed from the EAR.
     0694-0137 ``License Exceptions and Exclusions,'' which 
carries a burden-hour estimate average of 1.5 hours per submission 
(Note: submissions for License Exceptions are rarely required);
     0694-0096 ``Five Year Records Retention Period,'' which 
carries a burden-hour estimate of less than 1 minute; and
     0607-0152 ``Automated Export System (AES) Program,'' which 
carries a burden-hour estimate of 3 minutes per electronic submission.
    Additional information regarding these collections of information--
including all background materials--can be found at https://www.reginfo.gov/public/do/PRAMain and using the search function to 
enter either the title of the collection or the OMB Control Number.
    3. Pursuant to section 1762 of ECRA (50 U.S.C. 4821), this action 
is exempt from the Administrative Procedure Act (APA) (5 U.S.C. 553) 
requirements for notice of proposed rulemaking, opportunity for public 
participation and delay in effective date. Although this rule is exempt 
from public comments, BIS is seeking them anyway on a number of issues.
    4. Because a notice of proposed rulemaking and an opportunity for 
public comment are not required to be given for this rule by 5 U.S.C. 
553, or by any other law, the analytical requirements of the Regulatory 
Flexibility Act, 5 U.S.C. 601, et seq., are not applicable. 
Accordingly, no regulatory flexibility analysis is required, and none 
has been prepared.

List of Subjects

15 CFR Part 734

    Administrative practice and procedure, Exports, Inventions and 
patents, Research, Science and technology.

15 CFR Part 736

    Exports.

15 CFR Part 740

    Administrative practice and procedure, Exports, Reporting and 
recordkeeping requirements.

15 CFR Part 742

    Exports, Terrorism.

15 CFR Part 744

    Exports, Reporting and recordkeeping requirements, Terrorism.

15 CFR Part 772

    Exports.

15 CFR Part 774

    Exports, Reporting and recordkeeping requirements.

    Accordingly, parts 734, 736, 740, 742, 744, 772, and 774 of the 
Export Administration Regulations (15 CFR parts 730-774) are amended as 
follows:

PART 734--SCOPE OF THE EXPORT ADMINISTRATION REGULATIONS

0
1. The authority citation for part 734 continues to read as follows:

    Authority:  50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50 
U.S.C. 1701 et seq.; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 
950; E.O. 13020, 61 FR 54079, 3 CFR, 1996 Comp., p. 219; E.O. 13026, 
61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 
CFR, 2001 Comp., p. 783; E.O. 13637, 78 FR 16129, 3 CFR, 2014 Comp., 
p. 223; Notice of November 8, 2022, 87 FR 68015 (November 10, 2022).


0
2. Section 734.4 is amended by adding paragraph (a)(3) to read as 
follows:


Sec.  734.4  De minimis U.S. content.

    (a) * * *
    (3) There is no de minimis level for equipment meeting the 
parameters in ECCN 3B001.f.1.b.2.b of the Commerce Control List in 
supplement no. 1 to part 774 of the EAR, when the equipment is destined 
for use in the ``development'' or ``production'' of ``advanced-node 
integrated circuits'' and the ``advanced-node integrated circuits'' 
meet the parameter specified in paragraph (1) of that definition in 
Sec.  772.1 of the EAR, unless the country from which the foreign-made 
item was first exported \1\ has a commodity specified on an export 
control list.
* * * * *
----------------

    \1\ The Government of Japan added ArF-wet lithography equipment 
and other advanced semiconductor manufacturing equipment to its 
control list for all regions on July 23, 2023.

PART 736--GENERAL PROHIBITIONS



0
3. The authority citation for part 736 is revised to read as follows:

    Authority:  50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50 
U.S.C. 1701 et seq.; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 
950; E.O. 13020, 61 FR 54079, 3 CFR, 1996 Comp., p. 219; E.O. 13026, 
61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 
CFR, 2001 Comp., p. 783; E.O. 13338, 69 FR 26751, 3 CFR, 2004 Comp., 
p. 168; Notice of November 8, 2022, 87 FR 68015, 3 CFR, 2022 Comp., 
p. 563; Notice of May 8, 2023, 88 FR 30211 (May 10, 2023).


0
4. Supplement no. 1 to part 736 is amended by revising paragraph (d) to 
read as follows:

Supplement No. 1 to Part 736--General Orders

* * * * *

    (d) General Order No. 4: Exports, reexports, or transfers (in-
country) authorized under the Temporary General License (TGL) 
specified under paragraph (d)(1) of this supplement must also comply 
with the terms and conditions under paragraphs (d)(4) through (5) of 
this supplement.
    (1) TGL--Less restricted SME ``parts,'' ``components,'' or 
``equipment.'' This TGL only overcomes the license requirements 
described in Sec.  744.23(a)(4) of EAR when:
    (i) Product scope. The items subject to the EAR that are 
specified on the Commerce Control List (CCL) in supplement no. 1 to 
part 774 of the EAR that are designated as controlled on the CCL 
only for AT reasons; and
    (ii) End-use scope. The recipient is ``developing'' or 
``producing'' ``parts,'' ``components,'' or ``equipment'' (as 
specified in Sec.  744.23(a)(4) of the EAR) at the direction of a 
company that is headquartered in the United States or a destination 
specified in Country Group A:5 or A:6 and not majority-owned by an 
entity headquartered in either Macau or a destination specified in 
Country Group D:5.
    (2) [Reserved]
    (3) Validity date. The TGL under paragraph (d)(1) of this 
supplement expires on December 31, 2025.
    (4) End-use and end-user restrictions.
    (i) Restrictions related to part 744 of the EAR. The TGL under 
paragraph (d)(1) of this supplement does not overcome the license 
requirements of Sec.  744.11 or Sec.  744.21 of the EAR when an 
entity listed in supplements no. 4 or 7 to part 744 is a party to 
the transaction as described in Sec.  748.5(c) through (f) of the 
EAR, or when there is knowledge

[[Page 73447]]

of any other prohibited end use or end user (other than the Sec.  
744.23 of the EAR provisions specified above in the TGL).
    (ii) Indigenous production. The TGL under paragraph (d)(1) of 
this supplement cannot be used for the indigenous ``development'' or 
``production'' of Category 3B tools in either Macau or a destination 
specified in Country Group D:5, i.e., where the ``part,'' 
``component,'' or ``equipment'' is ``developed'' or ``produced'' at 
the direction of an entity that is headquartered in either Macau or 
a destination specified in Country Group D:5.
    (5) Recordkeeping requirement. All exports, reexports, transfer 
(in-country), and exports from abroad shipped under the 
authorization of this TGL are subject to the recordkeeping 
requirements of part 762 of the EAR. The records subject to this 
recordkeeping requirement include but are not limited to directives 
to the parties that are eligible to use this TGL and a list of the 
parties that have received directives. Each party that issues or 
acts upon a directive is responsible for keeping a record of that 
directive.
* * * * *

Supplement No. 1 to Part 736 [Amended]

0
5. Effective on January 1, 2026, supplement no. 1 to part 736 is 
further amended by removing and reserving paragraph (d).

PART 740--LICENSE EXCEPTIONS

0
6. The authority citation for part 740 continues to read as follows:

    Authority:  50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50 
U.S.C. 1701 et seq.; 22 U.S.C. 7201 et seq.; E.O. 13026, 61 FR 
58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 
2001 Comp., p. 783.


0
7. Section 740.2 is amended by revising paragraph (a)(9) to read as 
follows:


Sec.  740.2  Restrictions on all License Exceptions.

    (a)* * *
    (9)(i) The item is controlled under ECCN 3B001.a.4, c, d, f.1.b, k 
to p, 3B002.b or c, or associated software and technology in ECCN 
3D001, 3D002, 3D003, or 3E001 and is being exported, reexported, or 
transferred (in-country) to or within either Macau or a destination 
specified in Country Group D:5 of supplement no. 1 to this part, and 
the license exception is other than License Exception GOV, restricted 
to eligibility under the provisions of Sec.  740.11(b).
    (ii) The item is identified in paragraph (a)(9)(ii)(A) or (B) of 
this section, is being exported, reexported, or transferred (in-
country) to or within Macau or a destination specified in Country 
GroupD:5, and the license exception is other than: TMP, restricted to 
eligibility under the provisions of Sec.  740.9(a)(6); RPL, under the 
provisions of Sec.  740.10, including Sec.  740.10(a)(3)(v), which 
prohibits exports and reexports of replacement parts to a destination 
specified in Country Group E:1 (see supplement no. 1 to this part); 
GOV, restricted to eligibility under the provisions of Sec.  740.11(b); 
or TSU under the provisions of Sec.  740.13(a) and (c). Items 
restricted to eligibility only for the foregoing license exceptions 
are:
    (A) Controlled under ECCNs 3A090, 4A090, or associated software and 
technology in 3D001, 3E001, 4D090, and 4E001;
    (B) A computer, integrated circuit, ``electronic assembly'' or 
``component'' specified elsewhere on the CCL which meets or exceeds the 
performance parameters of ECCN 3A090 or 4A090.
* * * * *

PART 742--CONTROL POLICY--CCL BASED CONTROLS

0
8. The authority citation for part 742 continues to read as follows:

    Authority:  50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50 
U.S.C. 1701 et seq.; 22 U.S.C. 3201 et seq.; 42 U.S.C. 2139a; 22 
U.S.C. 7201 et seq.; 22 U.S.C. 7210; Sec. 1503, Pub. L. 108-11, 117 
Stat. 559; E.O. 12058, 43 FR 20947, 3 CFR, 1978 Comp., p. 179; E.O. 
12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 608; E.O. 12938, 59 FR 
59099, 3 CFR, 1994 Comp., p. 950; E.O. 13026, 61 FR 58767, 3 CFR, 
1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 
783; Presidential Determination 2003-23, 68 FR 26459, 3 CFR, 2004 
Comp., p. 320; Notice of November 8, 2022, 87 FR 68015 (November 10, 
2022).


0
9. Section 742.4 is amended by:
0
a. Revising paragraph (a);
0
b. Adding introductory text to paragraph (b);
0
c. Revising paragraphs (b)(1) and (2);
0
d. Removing and reserving paragraph (b)(3);
0
e. Revising paragraph (c); and
0
f. Adding paragraph (d).
    The revisions and additions read as follows:


Sec.  742.4  National security.

    (a) License requirements. It is the policy of the United States to 
restrict the export and reexport of items that would make a significant 
contribution to the military potential of any other destination or 
combination of destinations that would prove detrimental to the 
national security (NS) of the United States. Generally, items on the 
Commerce Control List in supplement no. 1 to part 774 of the EAR that 
have a reason for control of NS are those that are also listed on the 
Wassenaar Arrangement's ``List of Dual-use Goods and Technologies,'' as 
well as some items listed on the Wassenaar Arrangement's ``Munitions 
List.'' ``600 series'' items and 9x515 items are also controlled for NS 
reasons.
    (1) National Security column 1 (NS:1). A license is required for 
exports and reexports to all destinations, except Canada, for all items 
in ECCNs on the CCL that include NS Column 1 in the Country Chart 
column of the ``License Requirements'' section.
    (2) National Security column 2 (NS:2). A license is required to all 
destinations except those specified in Country Group A:1 (see 
supplement no. 1 to part 740 of the EAR), for all items in ECCNs on the 
CCL that include NS column 2 in the Commerce Country Chart column of 
the ``License Requirements'' section except those cameras in ECCN 
6A003.b.4.b that have a focal plane array with 111,000 or fewer 
elements and a frame rate of 60 Hz or less.
    (3) 6A003.b.4.b. A license is required to all destinations except 
those specified in Country Group A:1 (see supplement no. 1 to part 740 
of the EAR) for those cameras in ECCN 6A003.b.4.b that have a focal 
plane array with 111,000 or fewer elements and a frame rate of 60 Hz or 
less and for cameras being exported or reexported pursuant to an 
authorization described in Sec.  742.6(a)(2)(iii) or (v). The purpose 
of this control is to ensure that these items do not contribute to the 
military potential of destinations specified in Country Group D:1 (see 
supplement no. 1 to part 740 of the EAR) that would prove detrimental 
to the national security of the United States.
    (4) Certain semiconductor manufacturing equipment and associated 
software and technology. A license is required for exports, reexports, 
and transfers (in-country) to or within either Macau or a destination 
specified in Country Group D:5 in supplement no. 1 to part 740 of the 
EAR of items specified in 3B001.a.4, c, d, f.1.b, k to p; 3B002.b and 
c; 3D001 (for 3B001.a.4, c, d, f.1.b, k to p, 3B002.b and c); 3D002 
(for 3B001 a.4, c, d, f.1.b, k to p, 3B002.b and c); or 3E001 (for 
3B001.a.4, c, d, f.1.b, k to p, 3B002.b and c). The license 
requirements in this paragraph (a)(4) do not apply to deemed exports or 
deemed reexports.
    (b) Licensing policy. Each application is reviewed in light of 
prevailing policies with full consideration of all aspects of the 
proposed transaction. When the license application meets the criteria 
of more than one licensing policy, then the most restrictive licensing 
policy will be applied. The review generally includes: an analysis of 
the kinds and quantities of items to be

[[Page 73448]]

shipped; their military or civilian uses; the unrestricted availability 
abroad of the same or comparable items; the country of destination; the 
ultimate end users in the country of destination; and the intended end 
use.
    (1)(i) Country Group D:1. The policy for national security-
controlled items exported or reexported to any destination except a 
destination specified in Country Group D:1 (see supplement no. 1 to 
part 740 of the EAR) is to approve applications unless there is a 
significant risk that the items will be diverted to a destination 
specified in Country Group D:1. Except for those countries described in 
paragraphs (b)(5) through (7) and (9) of this section, the general 
policy for exports and reexports of items to Country Group D:1 (see 
supplement no. 1 to part 740 of the EAR) is to approve applications 
when BIS determines, on a case-by-case basis, that the items are for 
civilian use or would otherwise not make a significant contribution to 
the military potential of the country of destination that would prove 
detrimental to the national security of the United States.
    (ii) 9x515 and ``600 series'' items. When destined to a country 
listed in Country Group D:5 in supplement no. 1 to part 740 of the EAR, 
however, items classified under 9x515 or ``600 series'' ECCNs will be 
reviewed consistent with United States arms embargo policies in 22 CFR 
126.1 (International Traffic in Arms Regulations (ITAR)). When destined 
to the People's Republic of China or a country listed in Country Group 
E:1 in supplement no. 1 to part 740 of the EAR, items classified under 
any 9x515 ECCN will be subject to a policy of denial.
    (2) License applications for items specified in paragraph (a)(4) of 
this section will be reviewed consistent with license review policies 
in Sec.  744.23(d) of the EAR, except applications will be reviewed on 
a case-by-case basis if no license would be required under part 744 of 
the EAR.
* * * * *
    (c) Contract sanctity. Contract sanctity provisions are not 
available for license applications reviewed under this section, except 
for applications for items in paragraph (a)(4) of this section. For 
paragraph (a)(4), contract sanctity provisions are available for 
contracts signed before October 18, 2023.
    (d) License exceptions. Certain license exceptions are available 
only for national security items, such as License Exceptions GBS (see 
Sec.  740.4 of the EAR) and TSR (see Sec.  740.6 of the EAR), but other 
license exceptions may also be available for national security items, 
such as License Exception STA (see Sec.  740.20 of the EAR) or license 
exceptions based on the facts of the transaction, such as License 
Exceptions TMP (see Sec.  740.9 of the EAR) or GOV (see Sec.  740.11 of 
the EAR). See part 740 of the EAR for a full list of license exceptions 
and Sec.  740.2 of the EAR for license exception restrictions that 
apply to every license exception.

0
10. Section 742.6 is amended by revising paragraphs (a)(6) and (b)(10) 
to read as follows:


Sec.  742.6   Regional stability.

    (a) * * *
    (6) RS requirement that applies to advanced computing and 
semiconductor manufacturing items--(i) Exports, reexports, transfers 
(in-country) to or within either Macau or Country Group D:5. A license 
is required for items specified in ECCNs 3A090, 3B001.a.4, c, d, f.1.b, 
k to p, 3B002.b and c, 4A090, 5A992 (that meet or exceed the 
performance parameters of ECCNs 3A090 or 4A090); and associated 
software and technology in 3D001 (for 3A090, 3B001.a.4, c, d, f.1.b, k 
to p, 3B002.b and c), 3D002 (for 3B001a.4, c, d, f.1.b, k to p, 3B002.b 
and c), 3E001 (for 3A090, 3B001a.4, c, d, f.1.b, k to p, 3B002.b and 
c), 4D090, and 4E001 (for 4A090 and 4D090), and 5D992 (that meet or 
exceed the performance parameters of ECCNs 3A090 or 4A090) being 
exported, reexported, or transferred (in-country) to or within either 
Macau or a destination specified in Country Group D:5 in supplement no. 
1 to part 740 of the EAR.
    (ii) Exports from abroad originating in either China or Macau. A 
license is also required for the export from abroad originating in 
either China or Macau to any destination worldwide of 3E001 (for 3A090) 
technology developed by an entity headquartered in either China or 
Macau that is the direct product of software subject to the EAR and is 
for the ``production'' of commodities identified in ECCNs 3A090, 4A090, 
or identified elsewhere on the CCL that meet or exceed the performance 
parameters of ECCNs 3A090 or 4A090, consistent with Sec.  
734.9(h)(1)(i)(B)(1) and (h)(2)(ii) of the EAR.
    (iii) Deemed exports and reexports. The license requirements in 
paragraphs (a)(6)(i) and (ii) of this section do not apply to deemed 
exports or deemed reexports.
* * * * *
    (b) * * *
    (10) Advanced computing and semiconductor manufacturing items. 
License applications for items specified in paragraph (a)(6) of this 
section will be reviewed consistent with license review policies in 
Sec.  744.23(d) of the EAR, except applications will be reviewed on a 
case-by-case basis if no license would be required under part 744 of 
the EAR.
* * * * *

PART 744--CONTROL POLICY: END-USER AND END-USE BASED

0
11. The authority citation for part 744 continues to read as follows:

    Authority:  50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50 
U.S.C. 1701 et seq.; 22 U.S.C. 3201 et seq.; 42 U.S.C. 2139a; 22 
U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 12058, 43 FR 20947, 3 CFR, 
1978 Comp., p. 179; E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 
608; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 13026, 
61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13099, 63 FR 45167, 3 
CFR, 1998 Comp., p. 208; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., 
p. 783; E.O. 13224, 66 FR 49079, 3 CFR, 2001 Comp., p. 786; Notice 
of November 8, 2022, 87 FR 68015, 3 CFR, 2022 Comp., p. 563; Notice 
of September 7, 2023, 88 FR 62439 (September 11, 2023).


0
12. Section 744.6 is amended by revising paragraphs (c)(2), (d), and 
(e)(3) to read as follows:


Sec.  744.6   Restrictions on specific activities of ``U.S. persons.''

* * * * *
    (c) * * *
    (2) Consistent with paragraph (c)(1) of this section, BIS is hereby 
informing ``U.S. persons'' that a license is required for the following 
activities, which could involve `support' for the weapons of mass 
destruction-related end uses set forth in paragraph (b) of this 
section. Specifically, if you know your export, reexport, or transfer 
(in-country) meets any of the specified activities described in 
paragraphs (c)(2)(i) through (iii) of this section, then a license is 
required for shipping, transmitting, or transferring (in-country); 
facilitating the shipment, transmission, or transfer (in-country); or 
servicing (including installation) activities associated with any item, 
end use, or end user described in any of the following paragraphs:
    (i) ``Development'' or ``production'' of ``advanced-node ICs.'' To 
or within China or Macau, any item not subject to the EAR that you know 
will be used in the ``development'' or ``production'' of integrated 
circuits at a ``facility'' of an entity headquartered in either China 
or Macau, where ``production'' of ``advanced-node integrated circuits'' 
occurs;
    (ii) Category 3 items for ``development'' or ``production'' of 
``advanced-node ICs.'' To or within China or Macau, any item not 
subject to

[[Page 73449]]

the EAR and meeting the parameters of any ECCN in Product Groups B, C, 
D, or E in Category 3 of the CCL that you know will be used in the 
``development'' or ``production'' of integrated circuits at a 
``facility'' of an entity headquartered in either China or Macau where 
``production'' of integrated circuits occurs, but you do not know 
whether ``production'' of ``advanced-node integrated circuits'' occurs 
at such ``facility''; or
    (iii) Semiconductor manufacturing equipment. To or within either 
Macau or a destination specified in Country Group D:5, any item not 
subject to the EAR and meeting the parameters of ECCNs 3B001.a.4, c, d, 
f.1.b, k to p; 3B002.b and c; 3D001 (for 3B001.a.4, c, d, f.1.b, k to 
p, 3B002.b and c); 3D002 (for 3B001 a.4, c, d, f.1.b, k to p, 3B002.b 
and c); or 3E001 (for 3B001.a.4, c, d, f.1.b, k to p, 3B002.b and c) 
regardless of end use or end user.
    (d) Exceptions and exclusions. No license exceptions apply to the 
prohibitions described in paragraphs (b)(1) through (4) or paragraph 
(c)(2) of this section.
    (1) [Reserved]
    (2) Exclusion to paragraphs (b)(5) and (c)(2)(iii) of this section. 
Notwithstanding the prohibitions in paragraphs (b)(5) and (c)(2)(iii), 
``U.S. persons'' who are employees of a department or agency of the 
U.S. Government may `support' a `military-intelligence end use' or a 
`military-intelligence end user,' as described in paragraphs (b)(5) and 
(c)(2)(iii), if the `support' is provided in the performance of 
official duties in furtherance of a U.S. Government program that is 
authorized by law and subject to control by the President by other 
means. This paragraph (d)(2) does not authorize a department or agency 
of the U.S. Government to provide `support' that is otherwise 
prohibited by other administrative provisions or by statute. 
`Contractor support personnel' of a department or agency of the U.S. 
Government are eligible for this authorization when in the performance 
of their duties pursuant to the applicable contract or other official 
duties. `Contractor support personnel' for the purposes of this 
paragraph (d)(2) has the same meaning given to that term in Sec.  
740.11(b)(2)(ii) of the EAR. This authorization is not available when a 
department or agency of the U.S. Government acts as an agent on behalf 
of a non-U.S. Government person.
    (3) Exclusion to paragraphs (c)(2)(i) and (ii) of this section. The 
term ``production'' in paragraphs (c)(2)(i) and (ii) does not apply to 
back-end steps such as assembly, test, or packaging that do not alter 
the integrated circuit technology level. If there is a question at the 
time of export, reexport, or transfer (in-country) about whether a 
manufacturing stage is back-end or whether a manufacturing stage is 
back-end or a back-end activity alters the technology level, you may 
submit an advisory opinion request to BIS pursuant to Sec.  748.3(c) of 
the EAR for clarification.
    (4) Exclusion to paragraphs (c)(2)(i) through (iii) of this 
section. (i) Paragraphs (c)(2)(i) through (iii) do not apply to a 
natural ``U.S. person,'' as defined in paragraphs (a)(1) and (3) of the 
definition in Sec.  772.1 of the EAR, employed or working on behalf of 
a company headquartered in the United States or a destination specified 
in Country Group A:5 or A:6 and not majority-owned by an entity that is 
headquartered in either Macau or a destination specified in Country 
Group D:5.
    (ii) Any activities a natural ``U.S. person,'' as defined in 
paragraphs (a)(1) and (3) of that term's definition in Sec.  772.1 of 
the EAR, undertakes when employed or acting on behalf of a company not 
headquartered in the United States or a destination specified in 
Country Group A:5 or A:6 must comply with the requirements in this 
paragraph (d)(4) as applicable. For example, if a natural ``U.S. 
person'' is a freelancer who works or acts on behalf of a company 
headquartered in the United States or a destination specified in 
Country Group A:5 or A:6, those activities would not be prohibited 
under paragraphs (c)(2)(i) through (iii) of this section. However, if 
that same natural ``U.S. person'' was also working or acting on behalf 
of a company headquartered somewhere other than the United States or a 
destination specified in Country Group A:5 or A:6, the activities 
performed on behalf of such a company would not be excluded under 
paragraphs (c)(2)(i) through (iii) and a license would be required.
    (5) Exclusion to paragraph (c)(2)(iii) of this section. Paragraph 
(c)(2)(iii) does not apply to servicing (including installation) 
activities unless at a ``facility'' where ``production'' of ``advanced-
node integrated circuits'' occurs, which would require a license under 
paragraph (c)(2)(i) of this section.
* * * * *
    (e) * * *
    (3) Applications for licenses submitted pursuant to the notice of a 
license requirement set forth in paragraph (c)(2) of this section will 
be reviewed with a presumption of denial for Macau and destinations in 
Country Group D:5, except activities involving a foreign-made item that 
is not subject to the EAR and performs the same function as an item 
subject to the EAR, which will be reviewed with a presumption of 
approval. All other applications will be reviewed with a license review 
policy of case-by-case and consider factors, such as technology level, 
customers, and compliance plans.

0
12. Section 744.23 is revised to read as follows:


Sec.  744.23   ``Supercomputer,'' ``advanced-node integrated 
circuits,'' and semiconductor manufacturing equipment end use controls.

    (a) General prohibition. In addition to the license requirements 
for items specified on the CCL, you may not export, reexport, or 
transfer (in-country) without a license any item subject to the EAR 
described in paragraphs (a)(1) through (4) of this section when you 
have ``knowledge'' at the time of export, reexport, or transfer (in-
country) that the item is destined for a destination, end use, or type 
of end user described in paragraphs (a)(1) through (4) of this section, 
unless excluded by paragraph (a)(5) of this section.
    (1) ``Supercomputers''--(i) Item scope. (A) An integrated circuit 
(IC) subject to the EAR and specified in ECCN 3A001, 3A991, 4A994, 
5A002, 5A004, or 5A992; or
    (B) A computer, ``electronic assembly,'' or ``component'' subject 
to the EAR and specified in ECCN 4A003, 4A004, 4A994, 5A002, 5A004, or 
5A992.
    (ii) Destination and end-use scope. (A) The ``development,'' 
``production,'' ``use,'' operation, installation (including on-site 
installation), maintenance (checking), repair, overhaul, or 
refurbishing of a ``supercomputer'' located in or destined to China or 
Macau; or
    (B) The incorporation into, or the ``development'' or 
``production'' of any ``component'' or ``equipment'' that will be used 
in a ``supercomputer'' located in or destined to China or Macau.
    (2) ``Advanced-node ICs''--(i) Any item to ``production'' 
``facility'' of ``advanced-node ICs.'' Any items subject to the EAR 
when you know the items will be used in the ``development'' or 
``production'' of ICs at a ``facility'' located in China or Macau where 
``production'' of ``advanced-node ICs'' occurs.
    (ii) Category 3 items to ``facility'' where the technology node is 
unknown. Any item subject to the EAR specified in an ECCN in Product 
Groups B, C, D, or E in Category 3 of the CCL when you know the item 
will be used in the

[[Page 73450]]

``development'' or ``production'' of ICs at a ``facility'' located in 
China or Macau where ``production'' of integrated circuits occurs, but 
you do not know whether ``production'' of ``advanced-node ICs'' occurs 
at such ``facility.''
    (3) [Reserved]
    (4) Semiconductor manufacturing equipment (SME). Any item subject 
to the EAR and specified on the CCL when destined to either Macau or a 
destination specified in Country Group D:5 for the ``development'' or 
``production'' of `front-end integrated circuit ``production'' 
equipment' and ``components,'' ``assemblies,'' and ``accessories'' 
therefor specified in ECCN 3B001 (except 3B001.g, .h, and .j), 3B002, 
3B611, 3B991 (except 3B991.b.2), or 3B992.

    Note 1 to paragraph (a)(4):  Front-end integrated circuit 
``production'' equipment includes equipment used in the production 
stages from a blank wafer or substrate to a completed wafer or 
substrate (i.e., the integrated circuits are processed but they are 
still on the wafer or substrate). If there is a question at the time 
of export, reexport, or transfer (in-country) about whether 
equipment is used in front-end integrated circuit ``production,'' 
you may submit an advisory opinion request to BIS pursuant to Sec.  
748.3(c) of the EAR for clarification.

    (5) Back-end exclusion. For purposes of paragraph (a)(2) of this 
section, the term ``production'' does not apply to back-end steps such 
as assembly, test, or packaging that do not alter the integrated 
circuit technology level. If there is a question at the time of export, 
reexport, or transfer (in-country) about whether a manufacturing stage 
is back-end or whether a back-end activity alters the technology level, 
you may submit an Advisory Opinion request to BIS pursuant to Sec.  
748.3(c) of the EAR for clarification.
    (b) Additional prohibition on persons informed by BIS. BIS may 
inform persons, either individually by specific notice or through 
amendment to the EAR published in the Federal Register, that a license 
is required for a specific export, reexport, or transfer (in-country) 
of any item subject to the EAR to a certain end-user, because there is 
an unacceptable risk of use in, or diversion to, the end uses specified 
in paragraphs (a)(1) through (4) of this section. Specific notice is to 
be given only by, or at the direction of, the Deputy Assistant 
Secretary for Export Administration. When such notice is provided 
orally, it will be followed by a written notice within two working days 
signed by the Deputy Assistant Secretary for Export Administration or 
the Deputy Assistant Secretary's designee. However, the absence of any 
such notification does not excuse persons from compliance with the 
license requirements of paragraph (a) of this section.
    (c) License exceptions. No license exceptions may overcome the 
prohibition described in paragraph (a) of this section.
    (d) License review standards. Applications will be reviewed with a 
presumption of denial for Macau and destinations specified in Country 
Group D:5. However, there is a presumption of approval license review 
policy when there is a foreign-made item available that is not subject 
to the EAR and performs the same function as the item subject to the 
EAR, and for end users headquartered in the United States or a 
destination in Country Group A:5 or A:6, that are not majority-owned by 
an entity headquartered in either Macau or a destination specified in 
Country Group D:5. For all other applications, there is a case-by-case 
license review policy. License review will take into account factors 
including technology level, customers, and compliance plans. Contract 
sanctity will be a factor in the review of all applications.

PART 772--DEFINITIONS OF TERMS

0
13. The authority citation for part 772 continues to read as follows:

    Authority:  50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50 
U.S.C. 1701 et seq.; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 
783.


0
14. Section 772.1 is amended by adding definitions for ``Advanced-Node 
Integrated Circuits (Advanced-Node IC)'' and ``Extreme Ultraviolet 
(EUV)'' in alphabetical order to read as follows:


Sec.  772.1  Definitions of terms as used in the Export Administration 
Regulations (EAR).

* * * * *
    Advanced-Node Integrated Circuits (Advanced-Node IC). For parts 734 
and 744 of the EAR, advanced-node integrated circuits include 
integrated circuits that meet any of the following criteria:
    (1) Logic integrated circuits using a non-planar transistor 
architecture or with a ``production'' `technology node' of 16/14 
nanometers or less;
    (2) NOT AND (NAND) memory integrated circuits with 128 layers or 
more; or
    (3) Dynamic random-access memory (DRAM) integrated circuits using a 
``production'' `technology node' of 18 nanometer half-pitch or less.
    Note 1 to definition of ``Advanced-Node Integrated Circuits'': For 
the purposes of paragraphs (1) and (3) of this definition, the term 
technology node refers to the Logic Industry ``Node Range'' figure 
described in the International Roadmap for Devices and Systems, 2016 
edition (``More Moore'' White Paper), available at https://irds.ieee.org/images/files/pdf/2016_MM.pdf).
    Technical Note to definition of ``Advanced-Node Integrated 
Circuits'': For the purposes of paragraph (3) of this definition, the 
calculation methodology to be used in determining whether a DRAM 
integrated circuit uses a production technology node of 18 nanometer 
half-pitch or less is the calculated half-pitch method developed, 
adopted, and used by the Institute of Electrical and Electronics 
Engineers (IEEE) and published in the International Roadmap for Devices 
and Systems (IRDS), as follows:
[GRAPHIC] [TIFF OMITTED] TR25OC23.000


Cell size factor is 8, 6 or 4 depending on the DRAM architectures. Cell 
area is defined as Wordline*Bitline (which takes into consideration 
both transistor and capacitor dimensions)
* * * * *
    Extreme Ultraviolet (EUV). Extreme Ultraviolet (EUV) means 
electromagnetic spectrum wavelengths greater than 5 nm and less than 
124 nm.
* * * * *

[[Page 73451]]

PART 774--THE COMMERCE CONTROL LIST

0
15. The authority citation for part 774 continues to read as follows:

    Authority:  50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50 
U.S.C. 1701 et seq.; 10 U.S.C. 8720; 10 U.S.C. 8730(e); 22 U.S.C. 
287c, 22 U.S.C. 3201 et seq.; 22 U.S.C. 6004; 42 U.S.C. 2139a; 15 
U.S.C. 1824; 50 U.S.C. 4305; 22 U.S.C. 7201 et seq.; 22 U.S.C. 7210; 
E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 
FR 44025, 3 CFR, 2001 Comp., p. 783.


0
16. Supplement no. 1 to part 774 is amended by:
0
a. Revising ECCNs 3B001 and 3B002;
0
b. Removing ECCN 3B090; and
0
c. Revising ECCNs 3D001, 3D002, 3D003, and 3E001.
    The revisions read as follows:

Supplement No. 1 to Part 774--The Commerce Control List

* * * * *

3B001 Equipment for the manufacturing of semiconductor devices, 
materials, or related equipment, as follows (see List of Items 
Controlled) and ``specially designed'' ``components'' and 
``accessories'' therefor.

License Requirements

Reason for Control: NS, RS, AT

 
                                            Country chart (see Supp. No.
                Control(s)                         1 to part 738)
 
NS applies to 3B001.a.1 to a.3, b, e,       NS Column 2.
 f.1.a, f.2 to f.4, g to j.
NS applies to 3B001.a.4, c, d, f.1.b, k to  To or within Macau or a
 p.                                          destination specified in
                                             Country Group D:5 of
                                             supplement no. 1 to part
                                             740 of the EAR. See Sec.
                                             742.4(a)(4) of the EAR.
RS applies to 3B001.a.4, c, d, f.1.b, k to  To or within Macau or a
 p.                                          destination specified in
                                             Country Group D:5 of
                                             supplement no. 1 to part
                                             740 of the EAR. See Sec.
                                             742.6(a)(6) of the EAR.
AT applies to entire entry................  AT Column 1.
 

List Based License Exceptions (See Part 740 for a Description of All 
License Exceptions)

LVS: $500, except semiconductor manufacturing equipment specified in 
3B001.a.4, c, d, f.1.b, k to p.
GBS: Yes, except a.3 (molecular beam epitaxial growth equipment 
using gas sources), .e (automatic loading multi-chamber central 
wafer handling systems only if connected to equipment controlled by 
3B001.a.3, or .f), and .f (lithography equipment).

List of Items Controlled

Related Controls: See also 3B991
Related Definitions: N/A
Items:

    a. Equipment designed for epitaxial growth as follows:
    a.1. Equipment designed or modified to produce a layer of any 
material other than silicon with a thickness uniform to less than 
2.5% across a distance of 75 mm or more;
    Note: 3B001.a.1 includes atomic layer epitaxy (ALE) equipment.
    a.2. Metal Organic Chemical Vapor Deposition (MOCVD) reactors 
designed for compound semiconductor epitaxial growth of material 
having two or more of the following elements: aluminum, gallium, 
indium, arsenic, phosphorus, antimony, or nitrogen;
    a.3. Molecular beam epitaxial growth equipment using gas or 
solid sources;
    a.4. Equipment designed for silicon (Si), carbon doped silicon, 
silicon germanium (SiGe), or carbon doped SiGe epitaxial growth, and 
having all of the following:
    a.4.a. Multiple chambers and maintaining high vacuum (equal to 
or less than 0.01 Pa) or inert environment (water and oxygen partial 
pressure less than 0.01 Pa) between process steps;
    a.4.b. At least one preclean chamber designed to provide a 
surface preparation means to clean the surface of the wafer; and
    a.4.c. An epitaxial deposition operating temperature of 685 
[deg]C or below;
    b. Semiconductor wafer fabrication equipment designed for ion 
implantation and having any of the following:
    b.1. [Reserved]
    b.2. Being designed and optimized to operate at a beam energy of 
20 keV or more and a beam current of 10 mA or more for hydrogen, 
deuterium, or helium implant;
    b.3. Direct write capability;
    b.4. A beam energy of 65 keV or more and a beam current of 45 mA 
or more for high energy oxygen implant into a heated semiconductor 
material ``substrate''; or
    b.5. Being designed and optimized to operate at beam energy of 
20 keV or more and a beam current of 10mA or more for silicon 
implant into a semiconductor material ``substrate'' heated to 600 
[deg]C or greater;
    c. Etch equipment.
    c.1. Equipment designed for dry etching as follows:
    c.1.a. Equipment designed or modified for isotropic dry etching, 
having a largest `silicon germanium-to-silicon (SiGe:Si) etch 
selectivity' of greater than or equal to 100:1; or
    c.1.b. Equipment designed or modified for anisotropic etching of 
dielectric materials and enabling the fabrication of high aspect 
ratio features with aspect ratio greater than 30:1 and a lateral 
dimension on the top surface of less than 100 nm, and having all of 
the following:
    c.1.b.1. Radio Frequency (RF) power source(s) with at least one 
pulsed RF output; and
    c.1.b.2. One or more fast gas switching valve(s) with switching 
time less than 300 milliseconds; or
    c.1.c. Equipment designed or modified for anisotropic dry 
etching, having all of the following;
    c.1.c.1. Radio Frequency (RF) power source(s) with at least one 
pulsed RF output;
    c.1.c.2. One or more fast gas switching valve(s) with switching 
time less than 300 milliseconds; and
    c.1.c.3. Electrostatic chuck with twenty or more individually 
controllable variable temperature elements;
    c.2. Equipment designed for wet chemical processing and having a 
largest `silicon germanium-to-silicon (SiGe:Si) etch selectivity' of 
greater than or equal to 100:1;
    Note 1: 3B001.c includes etching by `radicals', ions, sequential 
reactions, or non-sequential reaction.
    Note 2: 3B001.c.1.c includes etching using RF pulse excited 
plasma, pulsed duty cycle excited plasma, pulsed voltage on 
electrodes modified plasma, cyclic injection and purging of gases 
combined with a plasma, plasma atomic layer etching, or plasma 
quasi-atomic layer etching.
    Technical Notes:
    1. For the purposes of 3B001.c, `silicon germanium-to-silicon 
(SiGe:Si) etch selectivity' is measured for a Ge concentration of 
greater than or equal to 30% (Si0.70Ge0.30).
    2. For the purposes of 3B001.c Note 1 and 3B001.d.14, `radical' 
is defined as an atom, molecule, or ion that has an unpaired 
electron in an open electron shell configuration.
    d. Semiconductor manufacturing deposition equipment, as follows:
    d.1. Equipment designed for cobalt (Co) electroplating or cobalt 
electroless-plating deposition processes;
    Note: 3B001.d.1 controls semiconductor wafer processing 
equipment.
    d.2. Equipment designed for:
    d.2.a. Chemical vapor deposition of cobalt (Co) fill metal; or
    d.2.b. Selective bottom-up chemical vapor deposition of tungsten 
(W) fill metal;
    d.3. Equipment designed to fabricate a metal contact by 
multistep processing within a single chamber by performing all of 
the following:
    d.3.a. Deposition of a tungsten layer, using an organometallic 
compound, while maintaining the wafer substrate temperature greater 
than 100 [deg]C and less than 500 [deg]C; and
    d.3.b. A plasma process using hydrogen (H2), 
including hydrogen and nitrogen (H2 + N2) or 
ammonia (NH3);
    d.4. Equipment or systems designed for multistep processing in 
multiple chambers or stations and maintaining high vacuum (equal to 
or less than 0.01 Pa) or inert environment between process steps, as 
follows:
    d.4.a. Equipment designed to fabricate a metal contact by 
performing the following processes:
    d.4.a.1. Surface treatment plasma process using hydrogen 
(H2), including hydrogen and nitrogen (H2 + 
N2) or ammonia (NH3), while maintaining the 
wafer substrate at a temperature greater than 100 [deg]C and less 
than 500 [deg]C;
    d.4.a.2. Surface treatment plasma process using oxygen 
(O2) or ozone (O3), while maintaining the 
wafer substrate at a

[[Page 73452]]

temperature greater than 40 [deg]C and less than 500 [deg]C; and
    d.4.a.3. Deposition of a tungsten layer while maintaining the 
wafer substrate temperature greater than 100 [deg]C and less than 
500 [deg]C;
    d.4.b. Equipment designed to fabricate a metal contact by 
performing the following processes:
    d.4.b.1 Surface treatment process using a remote plasma 
generator and an ion filter; and
    d.4.b.2. Deposition of a cobalt (Co) layer selectively onto 
copper (Cu) using an organometallic compound;
    Note: This control does not apply to equipment that is non-
selective.
    d.4.c. Equipment designed to fabricate a metal contact by 
performing all the following processes:
    d.4.c.1. Deposition of a titanium nitride (TiN) or tungsten 
carbide (WC) layer, using an organometallic compound, while 
maintaining the wafer substrate at a temperature greater than 20 
[deg]C and less than 500 [deg]C;
    d.4.c.2. Deposition of a cobalt (Co) layer using a physical 
sputter deposition technique and having a process pressure greater 
than 133.3 mPa and less than 13.33 Pa, while maintaining the wafer 
substrate at a temperature below 500 [deg]C; and
    d.4.c.3. Deposition of a cobalt (Co) layer using an 
organometallic compound and having a process pressure greater than 
133.3 Pa and less than 13.33 kPa, while maintaining the wafer 
substrate at a temperature greater than 20 [deg]C and less than 500 
[deg]C;
    d.4.d. Equipment designed to fabricate copper (Cu) interconnects 
by performing all of the following processes:
    d.4.d.1. Deposition of a cobalt (Co) or ruthenium (Ru) layer 
using an organometallic compound and having a process pressure 
greater than 133.3 Pa and less than 13.33 kPa, while maintaining the 
wafer substrate at a temperature greater than 20 [deg]C and less 
than 500 [deg]C; and
    d.4.d.2. Deposition of a copper layer using a physical vapor 
deposition technique and having a process pressure greater than 
133.3 mPa and less than 13.33 kPa, while maintaining the wafer 
substrate at a temperature below 500 [deg]C;
    d.5. Equipment designed for plasma enhanced chemical vapor 
deposition of carbon hard masks more than 100 nm thick and with 
stress less than 450 Mpa;
    d.6. Atomic Layer Deposition (ALD) equipment designed for area 
selective deposition of a barrier or liner using an organometallic 
compound;
    Note: 3B001.d.6 includes equipment capable of area selective 
deposition of a barrier layer to enable fill metal contact to an 
underlying electrical conductor without a barrier layer at the fill 
metal via interface to an underlying electrical conductor.
    d.7. Equipment designed for Atomic Layer Deposition (ALD) of 
tungsten (W) to fill an entire interconnect or in a channel less 
than 40 nm wide, while maintaining the wafer substrate at a 
temperature less than 500 [deg]C.
    d.8 Equipment designed for Atomic Layer Deposition (ALD) of 
`work function metal' having all of the following:
    d.8.a. More than one metal source of which one is designed for 
an aluminum (Al) precursor;
    d.8.b. Precursor vessel designed and enabled to operate at a 
temperature greater than 30 [deg]C; and
    d.8.c. Designed for depositing a `work function metal' having 
all of the following:
    d.8.c.1. Deposition of titanium-aluminum carbide (TiAlC); and
    d.8.c.2. Enabling a work function greater than 4.0eV;
    Technical Note: For the purposes of 3B001.d.8, `work function 
metal' is a material that controls the threshold voltage of a 
transistor.
    d.9. Spatial Atomic Layer Deposition (ALD) equipment having a 
wafer support platform that rotates around an axis having any of the 
following:
    d.9.a. A spatial plasma enhanced atomic layer deposition mode of 
operation;
    d.9.b. A plasma source; or
    d.9.c. A plasma shield or means to confine the plasma to the 
plasma exposure process region;
    d.10. Equipment designed for Atomic Layer Deposition (ALD) or 
Chemical Vapor Deposition (CVD) of plasma enhanced of low fluorine 
tungsten (FW) (fluorine (F) concentration less than 10\19\ atoms/
cm\3\) films;
    d.11. Equipment designed to deposit a metal layer, in a vacuum 
(equal to or less than 0.01 Pa) or inert gas environment, and having 
all of the following:
    d.11.a. A Chemical Vapor Deposition (CVD) or cyclic deposition 
process for depositing a tungsten nitride (WN) layer, while 
maintaining the wafer substrate at a temperature greater than 20 
[deg]C and less than 500 [deg]C; and
    d.11.b. A Chemical Vapor Deposition (CVD) or cyclic deposition 
process for depositing a tungsten (W) layer having a process 
pressure greater than 133.3 Pa and less than 53.33 kPa, while 
maintaining the wafer substrate at a temperature greater than 20 
[deg]C and less than 500 [deg]C.
    d.12. Equipment designed for depositing a metal layer, in a 
vacuum (equal to or less than 0.01 Pa) or inert gas environment, and 
having any of the following:
    d.12.a. Selective tungsten (W) growth without a barrier; or
    d.12.b. Selective molybdenum (Mo) growth without a barrier;
    d.13. Equipment designed for depositing a ruthenium layer (Ru) 
using an organometallic compound, while maintaining the wafer 
substrate at a temperature greater than 20 [deg]C and less than 500 
[deg]C;
    d.14. Equipment designed for deposition assisted by remotely 
generated `radicals', enabling the fabrication of a silicon (Si) and 
carbon (C) containing film, and having all of the following 
properties of the deposited film:
    d.14.a. A dielectric constant (k) of less than 5.3;
    d.14.b. An aspect ratio greater than 5:1 in features with 
lateral openings of less than 70 nm; and
    d.14.c. A feature-to-feature pitch of less than 100 nm;
    d.15. Equipment designed for void free plasma enhanced 
deposition of a low-k dielectric layer in gaps between metal lines 
less than 25 nm and having an aspect ratio greater than or equal to 
1:1 with a less than 3.3 dielectric constant;
    d.16. Equipment designed for deposition of a film, containing 
silicon and carbon, and having a dielectric constant (k) of less 
than 5.3, into lateral openings having widths of less than 70 nm and 
aspect ratios greater than 5:1 (depth: width) and a feature-to-
feature pitch of less than 100 nm, while maintaining the wafer 
substrate at a temperature greater than 400 [deg]C and less than 650 
[deg]C, and having all of the following:
    d.16.a. Boat designed to hold multiple vertically stacked 
wafers;
    d.16.b. Two or more vertical injectors; and
    d.16.c. A silicon source and propene are introduced to a 
different injector than a nitrogen source or an oxygen source;
    e. Automatic loading multi-chamber central wafer handling 
systems having all of the following:
    e.1. Interfaces for wafer input and output, to which more than 
two functionally different `semiconductor process tools' controlled 
by 3B001.a.1, 3B001.a.2, 3B001.a.3 or 3B001.b are designed to be 
connected; and
    e.2. Designed to form an integrated system in a vacuum 
environment for `sequential multiple wafer processing';
    Note: 3B001.e does not control automatic robotic wafer handling 
systems ``specially designed'' for parallel wafer processing.
    Technical Notes:
    1. For the purposes of 3B001.e, `semiconductor process tools' 
refers to modular tools that provide physical processes for 
semiconductor production that are functionally different, such as 
deposition, implant or thermal processing.
    2. For the purposes of 3B001.e, `sequential multiple wafer 
processing' means the capability to process each wafer in different 
`semiconductor process tools', such as by transferring each wafer 
from one tool to a second tool and on to a third tool with the 
automatic loading multi-chamber central wafer handling systems.
    f. Lithography equipment as follows:
    f.1. Align and expose step and repeat (direct step on wafer) or 
step and scan (scanner) equipment for wafer processing using photo-
optical or X-ray methods and having any of the following:
    f.1.a. A light source wavelength shorter than 193 nm; or
    f.1.b. A light source wavelength equal to or longer than 193 nm 
and having all of the following:
    f.1.b.1. The capability to produce a pattern with a ``Minimum 
Resolvable Feature size'' (MRF) of 45 nm or less; and
    f.1.b.2. Having any of the following:
    f.1.b.2.a. A maximum `dedicated chuck overlay' value of less 
than or equal to 1.50 nm; or
    f.1.b.2.b. A maximum `dedicated chuck overlay' value greater 
than 1.50 nm but less than or equal to 2.4 nm;
    Technical Notes: For the purposes of 3B001.f.1.b:
    1. The `Minimum Resolvable Feature size' (MRF), i.e.,resolution, 
is calculated by the following formula:

[[Page 73453]]



                                   (an exposure light source wavelength
                                    in nm) x (K factor)
                                  --------------------------------------
MRF                                --------------------
                                   maximum numerical aperture
 

where, for the purposes of 3.B.1.f.1.b, the K factor = 0.25 `MRF' is 
also known as resolution.
    2. `Dedicated chuck overlay' is the alignment accuracy of a new 
pattern to an existing pattern printed on a wafer by the same 
lithographic system. `Dedicated chuck overlay' is also known as 
single machine overlay.
    f.2. Imprint lithography equipment capable of production 
features of 45 nm or less;
    Note: 3B001.f.2 includes:

--Micro contact printing tools
--Hot embossing tools
--Nano-imprint lithography tools
--Step and flash imprint lithography (S-FIL) tools

    f.3. Equipment ``specially designed'' for mask making having all 
of the following:
    f.3.a. A deflected focused electron beam, ion beam or ``laser'' 
beam; and
    f.3.b. Having any of the following:
    f.3.b.1. A Full-Width Half-Maximum (FWHM) spot size smaller than 
65 nm and an image placement less than 17 nm (mean + 3 sigma); or
    f.3.b.2. [Reserved]
    f.3.b.3. A second-layer overlay error of less than 23 nm (mean + 
3 sigma) on the mask;
    f.4. Equipment designed for device processing using direct 
writing methods, having all of the following:
    f.4.a. A deflected focused electron beam; and
    f.4.b. Having any of the following:
    f.4.b.1. A minimum beam size equal to or smaller than 15 nm; or
    f.4.b.2. An overlay error less than 27 nm (mean + 3 sigma);
    g. Masks and reticles, designed for integrated circuits 
controlled by 3A001;
    h. Multi-layer masks with a phase shift layer not specified by 
3B001.g and designed to be used by lithography equipment having a 
light source wavelength less than 245 nm;
    Note: 3B001.h. does not control multi-layer masks with a phase 
shift layer designed for the fabrication of memory devices not 
controlled by 3A001.
    N.B.: For masks and reticles, ``specially designed'' for optical 
sensors, see 6B002.
    i. Imprint lithography templates designed for integrated 
circuits by 3A001;
    j. Mask ``substrate blanks'' with multilayer reflector structure 
consisting of molybdenum and silicon, and having all of the 
following:
    j.1. ``Specially designed'' for ``Extreme Ultraviolet'' 
(``EUV'') lithography; and
    j.2. Compliant with SEMI Standard P37;
    k. Equipment designed for ion beam deposition or physical vapor 
deposition of a multi-layer reflector for ``EUV'' masks;
    l. ``EUV'' pellicles;
    m. Equipment for manufacturing ``EUV'' pellicles;
    n. Equipment designed for coating, depositing, baking, or 
developing photoresist formulated for ``EUV'' lithography;
    o. Annealing equipment, operating in a vacuum (equal to or less 
than 0.01 Pa) environment, performing any of the following:
    o.1. Reflow of copper (Cu) to minimize or eliminate voids or 
seams in copper (Cu) metal interconnects; or
    o.2. Reflow of cobalt (Co) tungsten (W) fill metal to minimize 
or eliminate voids or seams;
    p. Removal and cleaning equipment as follows:
    p.1. Equipment designed for removing polymeric residue and 
copper oxide (CuO) film and enabling deposition of copper (Cu) metal 
in a vacuum (equal to or less than 0.01 Pa) environment;
    p.2. Single wafer wet cleaning equipment with surface 
modification drying; or
    p.3. Equipment designed for dry surface oxide removal preclean 
or dry surface decontamination.
    Note to 3B001.p.1 and p.3: These controls do not apply to 
deposition equipment.
3B002 Test or inspection equipment ``specially designed'' for 
testing or inspecting finished or unfinished semiconductor devices 
as follows (see List of Items Controlled) and ``specially designed'' 
``components'' and ``accessories'' therefor.

License Requirements

Reason for Control: NS, RS, AT

 
                                            Country chart (see supp. No.
                Control(s)                         1 to part 738)
 
NS applies to 3B002.a.....................  NS Column 2.
NS applies to 3B002.b and c...............  To or within Macau or a
                                             destination specified in
                                             Country Group D:5 of
                                             supplement no. 1 to part
                                             740 of the EAR. See Sec.
                                             742.4(a)(4) of the EAR.
RS applies to 3B002.b and c...............  To or within Macau or a
                                             destination specified in
                                             Country Group D:5 of
                                             supplement no. 1 to part
                                             740 of the EAR. See Sec.
                                             742.6(a)(6) of the EAR.
AT applies to entire entry................  AT Column 1.
 

List Based License Exceptions (See Part 740 for a Description of All 
License Exceptions)

LVS: $500, except semiconductor manufacturing equipment specified in 
3B002.b and c.
GBS: Yes

List of Items Controlled

Related Controls: See also 3A999.a and 3B992
Related Definitions: N/A
Items:

    a. For testing S-parameters of items specified by 3A001.b.3;
    b. For testing microwave integrated circuits controlled by 
3A001.b.2;
    c. Inspection equipment designed for ``EUV'' mask blanks or 
``EUV'' patterned masks.
* * * * *
3D001 ``Software'' ``specially designed'' for the ``development'' or 
``production'' of commodities controlled by 3A001.b to 3A002.h, or 
3B (except 3B991 and 3B992).

License Requirements

Reason for Control: NS, RS, AT

 
                                            Country chart (see supp. No.
                Control(s)                         1 to part 738)
 
NS applies to ``software'' for commodities  NS Column 1.
 controlled by 3A001.b to 3A001.h, 3A002,
 and 3B (except 3B001.a.4, c, d, f.1.b, k
 to p, 3B002.b and c).
NS applies to ``software'' for commodities  To or within Macau or a
 controlled by 3B001.a.4, c, d, f.1.b, k     destination specified in
 to p, 3B002.b and c.                        Country Group D:5 of
                                             supplement no. 1 to part
                                             740 of the EAR. See Sec.
                                             742.4(a)(4) of the EAR.
RS applies to ``software'' for commodities  To or within Macau or a
 controlled by 3B001.a.4, c, d, f.1.b, k     destination specified in
 to p, 3B002.b and c.                        Country Group D:5 of
                                             supplement no. 1 to part
                                             740 of the EAR. See Sec.
                                             742.6(a)(6) of the EAR.
RS applies to ``software'' for commodities  China and Macau See Sec.
 controlled by 3A090.                        742.6(a)(6).
AT applies to entire entry................  AT Column 1.
 

Reporting Requirements

    See Sec.  743.1 of the EAR for reporting requirements for 
exports under License Exceptions, Special Comprehensive Licenses, 
and Validated End-User authorizations.

List Based License Exceptions (See Part 740 for a Description of All 
License Exceptions)

TSR: Yes, except N/A for RS and for ``software'' ``specially 
designed'' for the ``development'' or ``production'' of Traveling 
Wave Tube Amplifiers described in 3A001.b.8 having operating 
frequencies exceeding 18 GHz.

Special Conditions for STA

STA: License Exception STA may not be used to ship or transmit 
``software'' ``specially designed'' for the ``development'' or 
``production'' of equipment specified by 3A002.g.1 or 3B001.a.2 to 
any of the destinations specified in Country Group A:6 (See 
Supplement No.1 to part 740 of the EAR).

[[Page 73454]]

List of Items Controlled

Related Controls: N/A
Related Definitions: N/A
Items:

    The list of items controlled is contained in the ECCN heading.

3D002 ``Software'' ``specially designed'' for the ``use'' of 
equipment controlled by 3B001.a to .f and .k to .p, or 3B002.

License Requirements

Reason for Control: NS, RS, AT

 
                                            Country chart (see Supp. No.
                Control(s)                         1 to part 738)
 
NS applies to entire entry, except          NS Column 1.
 ``software'' for 3B001.a.4 c, d, f.1.b, k
 to p, 3B002.b and c.
NS applies to ``software'' for 3B001.a.4,   To or within Macau or a
 c, d, f.1.b, k to p, 3B002.b and c.         destination specified in
                                             Country Group D:5 of
                                             supplement no. 1 to part
                                             740 of the EAR. See Sec.
                                             742.4(a)(4) of the EAR.
RS applies to ``software'' for 3B001.a.4,   To or within Macau or a
 c, d, f.1.b, k to p, 3B002.b and c.         destination specified in
                                             Country Group D:5 of
                                             supplement no. 1 to part
                                             740 of the EAR. See Sec.
                                             742.6(a)(6) of the EAR.
AT applies to entire entry................  AT Column 1.
 

    License Requirements Note: See Sec.  744.17 of the EAR for 
additional license requirements for microprocessors having a 
processing speed of 5 GFLOPS or more and an arithmetic logic unit 
with an access width of 32 bit or more, including those 
incorporating ``information security'' functionality, and associated 
``software'' and ``technology'' for the ``production'' or 
``development'' of such microprocessors.

List Based License Exceptions (See Part 740 for a Description of All 
License Exceptions)

TSR: Yes, except N/A for RS.

List of Items Controlled

Related Controls: Also see 3D991.
Related Definitions: N/A
Items:

    The list of items controlled is contained in the ECCN heading.

3D003 `Computational lithography' ``software'' ``specially 
designed'' for the ``development'' of patterns on ``EUV''-
lithography masks or reticles.

License Requirements

Reason for Control: NS, AT

 
                                            Country chart (see Supp. No.
                Control(s)                         1 to part 738)
 
NS applies to entire entry................  NS Column 1.
AT applies to entire entry................  AT Column 1.
 

List Based License Exceptions (See Part 740 for a Description of All 
License Exceptions)

TSR: Yes

List of Items Controlled

Related Controls: N/A
Related Definitions: For the purposes of 3D003, `computational 
lithography' is the use of computer modelling to predict, correct, 
optimize and verify imaging performance of the lithography process 
over a range of patterns, processes, and system conditions.
Items:

    The list of items controlled is contained in the ECCN heading.
* * * * *
3E001 ``Technology'' according to the General Technology Note for 
the ``development'' or ``production'' of commodities controlled by 
3A (except 3A980, 3A981, 3A991, 3A992, or 3A999), 3B (except 3B991 
or 3B992) or 3C (except 3C992).

License Requirements

Reason for Control: NS, MT, NP, RS, AT

 
                                            Country chart (see Supp. No.
                Control(s)                         1 to part 738)
 
NS applies to ``technology'' for            NS Column 1.
 commodities controlled by 3A001, 3A002,
 3A003, 3B001 (except 3B001.a.4, c, d,
 f.1.b, k to p), 3B002 (except 3B002.b and
 c), or 3C001 to 3C006.
NS applies to ``technology'' for            To or within Macau or a
 3B001.a.4, c, d, f.1.b, k to p, 3B002.b     destination specified in
 and c.                                      Country Group D:5 of
                                             supplement no. 1 to part
                                             740 of the EAR. See Sec.
                                             742.4(a)(4) of the EAR.
MT applies to ``technology'' for            MT Column 1.
 commodities controlled by 3A001 or 3A101
 for MT Reasons.
NP applies to ``technology'' for            NP Column 1.
 commodities controlled by 3A001, 3A201,
 or 3A225 to 3A234 for NP reasons.
RS applies to ``technology'' for            China and Macau (See Sec.
 commodities controlled by 3A090.            742.6(a)(6)).
RS applies to ``technology'' for            Worldwide (See Sec.
 commodities controlled by 3A090, when       742.6(a)(6)).
 exported from China or Macau.
RS applies to ``technology'' for            To or within Macau or a
 commodities controlled by 3B001.a.4, c,     destination specified in
 d, f.1.b, k to p, 3B002.b and c.            Country Group D:5 of
                                             supplement no. 1 to part
                                             740 of the EAR. See Sec.
                                             742.6(a)(6) of the EAR.
AT applies to entire entry................  AT Column 1.
 

    License Requirements Note: See Sec.  744.17 of the EAR for 
additional license requirements for microprocessors having a 
processing speed of 5 GFLOPS or more and an arithmetic logic unit 
with an access width of 32 bit or more, including those 
incorporating ``information security'' functionality, and associated 
``software'' and ``technology'' for the ``production'' or 
``development'' of such microprocessors.

Reporting Requirements

See Sec.  743.1 of the EAR for reporting requirements for exports 
under License Exceptions, Special Comprehensive Licenses, and 
Validated End-User authorizations.

List Based License Exceptions (See Part 740 for a Description of All 
License Exceptions)

TSR: Yes, except N/A for MT, NP, and RS, and ``technology'' for the 
``development'' or ``production'' of:
(a) vacuum electronic device amplifiers described in 3A001.b.8, 
having operating frequencies exceeding 19 GHz;
(b) solar cells, coverglass-interconnect-cells or covered-
interconnect-cells (CIC) ``assemblies'', solar arrays and/or solar 
panels described in 3A001.e.4;
(c) ``Monolithic Microwave Integrated Circuit'' (``MMIC'') 
amplifiers in 3A001.b.2; and
(d) discrete microwave transistors in 3A001.b.3.

Special Conditions for STA

STA: License Exception STA may not be used to ship or transmit 
``technology'' according to the General Technology Note for the 
``development'' or ``production'' of equipment specified by ECCNs 
3A002.g.1 or 3B001.a.2 to any of the destinations specified in 
Country Group A:6 (See Supplement No. 1 to part 740 of the EAR). 
License Exception STA may not be used to ship or transmit 
``technology'' according to the General Technology Note for the 
``development'' or ``production'' of components specified by ECCN 
3A001.b.2 or b.3 to any of the destinations specified in Country 
Group A:5 or A:6 (See Supplement No. 1 to part 740 of the EAR).

[[Page 73455]]

List of Items Controlled

Related Controls: (1) ``Technology'' according to the General 
Technology Note for the ``development'' or ``production'' of certain 
``space-qualified'' atomic frequency standards described in Category 
XV(e)(9), MMICs described in Category XV(e)(14), and oscillators 
described in Category XV(e)(15) of the USML are ``subject to the 
ITAR'' (see 22 CFR parts 120 through 130). See also 3E101, 3E201 and 
9E515. (2) ``Technology'' for ``development'' or ``production'' of 
``Microwave Monolithic Integrated Circuits'' (``MMIC'') amplifiers 
in 3A001.b.2 is controlled in this ECCN 3E001; 5E001.d refers only 
to that additional ``technology'' ``required'' for 
telecommunications.
Related Definition: N/A
Items:

    The list of items controlled is contained in the ECCN heading.
    Note 1: 3E001 does not control ``technology'' for equipment or 
``components'' controlled by 3A003.
    Note 2: 3E001 does not control ``technology'' for integrated 
circuits controlled by 3A001.a.3 to a.14, having all of the 
following:
    (a) Using ``technology'' at or above 0.130 [mu]m; and
    (b) Incorporating multi-layer structures with three or fewer 
metal layers.
    Note 3: 3E001 does not apply to `Process Design Kits' (`PDKs') 
unless they include libraries implementing functions or technologies 
for items specified by 3A001 or 3A090.
    Technical Note: For the purposes of 3E001 Note 3, a `Process 
Design Kit' (`PDK') is a software tool provided by a semiconductor 
manufacturer to ensure that the required design practices and rules 
are taken into account in order to successfully produce a specific 
integrated circuit design in a specific semiconductor process, in 
accordance with technological and manufacturing constraints (each 
semiconductor manufacturing process has its particular `PDK').
* * * * *

Thea D. Rozman Kendler,
Assistant Secretary for Export Administration.
[FR Doc. 2023-23049 Filed 10-18-23; 8:45 am]
BILLING CODE 3510-33-P


