On September 9, 2022, the Commerce Department’s Bureau of Industry and Security (BIS) published an Interim Final Rule in the Federal Register that clarifies the licensing requirements needed for U.S. companies to release low-level technology to meet international standards. implementation activities.
The rule was issued in response to concerns about Huawei Technology’s participation in international standards organizations.1 Huawei and a number of its non-US subsidiaries have been on the BIS Entity List since May 2019.2 The Entity List imposes licensing requirements under the Export Administration Regulations (“EAR”) for the export, re-export and transfer (in-country) of most items subject to the EAR to listed entities. Items subject to EAR include items of US origin, items with a certain threshold of US content, and information necessary for “development”, “production”, “use”, operation , installation, maintenance, repair, overhaul or refurbishment of an Object.3
As Huawei and its subsidiaries expand their participation in international standards bodies, U.S. companies have expressed concern that the release of software or technology by standards bodies in which Huawei companies are involved would inadvertently violate laws. on export control. In response, the BIS issued a series of temporary blanket licenses and limited authorizations to allow US companies to participate in international standards bodies under certain circumstances.4 This interim final rule is intended to further clarify the scope of authorized standardization activities covered by the authorization.
Announcing the rule, Commerce Undersecretary for Industry and Security Alan Estevez said, “U.S. stakeholders must be fully engaged in international standards organizations, especially when critical but sometimes invisible standards they establish have important implications for national security as well as for trade. acknowledging the importance of having a rule in place to protect U.S. participation in international standardization activity.5
Amendments to the EAR
This rule amends § 744.11 and § 744.16 of the EAR to provide an exclusion from licensing requirements that would otherwise apply as a result of designation on the Entity List in certain circumstances:
- The technology or software is either: (i) classified as EAR99, controlled only for anti-terrorism (AT) reasons; or (ii), classified in one of the few specifically listed classifications when published specifically for the “development”, “production” and “use” of cryptographic features;
- The “release” of technology or software must be carried out as part of a “standards-related activity”; and
- There is an intention to “publish” the resulting standard.6
The rule also amends § 772.1 of the EAR to define “standards-related activity”, which includes the development, adoption or application of any standard, with the intent that the resulting standard be “published” under written form for repeated reference. Or use.seven
The rule became effective on its publication date, September 9, 2022. Interested parties can still comment on the scope and effectiveness of the rule. These comments must be submitted no later than November 8, 2022.8
2 84 Fed. Reg. 22961 (May 21, 2019), https://www.federalregister.gov/documents/2019/05/21/2019-10616/addition-of-entities-to-the-entity-list.
3 https://bis.doc.gov/index.php/policy-guidance/deemed-exports/deemed-exports-faqs/faq/33-what-is-technology; https://www.bis.doc.gov/index.php/documents/regulations-docs/2382-part-734-scope-of-the-export-administration-regulations-1/file#:~:text=( 1) %E2%80%9C Subject to, not affected by these regulations.