15 CFR 734.9 - Foreign-Direct Product (FDP) Rules.

Regulations last checked for updates: Nov 22, 2024

Title 15 - Commerce and Foreign Trade last revised: Oct 25, 2024

View all text of Part 734 [§ 734.1 - § 734.20]

§ 734.9 - Foreign-Direct Product (FDP) Rules.

Foreign-produced items located outside the United States are subject to the EAR when they are a “direct product” of specified “technology” or “software,” or are produced by a complete plant or 'major component' of a plant that itself is a “direct product” of specified “technology” or “software.” If a foreign-produced item is subject to the EAR, then you should separately determine the license requirements that apply to that foreign-produced item (e.g., by assessing the item classification, destination, end-use, and end-user in the relevant transaction). Not all transactions involving foreign-produced items that are subject to the EAR require a license. Those transactions that do require a license may be eligible for a license exception.

(a) Definitions and model certification—(1) Definitions. The terms defined in this paragraph are specific to § 734.9 of the EAR. These terms are indicated by single quotation marks. Terms that are in double quotation marks are defined in part 772 of the EAR.

(i) Major component. A major component of a plant located outside the United States means “equipment” that is essential to the “production” of an item, including testing “equipment.”

(ii) [Reserved]

(2) Model certification. Exporters, reexporters, and transferors may obtain a written certification from a supplier that asserts an item being provided would be subject to the EAR if future transactions meet the destination or end user scope of one or more of the Foreign Direct Product (FDP) rules under § 734.9. The model certificate described by BIS in supplement no. 1 to part 734 is not required under the EAR, but through its provision, the certificate may assist exporters, reexporters, and transferors with the process of resolving potential red flags regarding whether an item is subject to the EAR based on § 734.9. The model certificate provided by BIS contemplates signature by an official or designated employee of the certifying company and inclusion of all the information described in paragraph (b) of supplement no. 1 to part 734. While this certificate is expected to be useful for a company to understand the application of the EAR to an item, BIS does not view this as the only step to be completed during a company's due diligence process. See supplement no. 1 to part 734 and supplement no. 3 to part 732 of the EAR.

(b) National Security FDP rule. A foreign-produced item is subject to the EAR if it meets both the product scope in paragraph (b)(1) of this section and the country scope in paragraph (b)(2) of this section.

(1) Product scope of National Security FDP rule. The product scope applies if a foreign-produced item meets the conditions of either paragraph (b)(1)(i) or (ii) of this section.

(i) “Direct product” of “technology” or “software.” A foreign-produced item meets the product scope of this paragraph if it meets both of the following conditions:

(A) The foreign-produced item is the “direct product” of U.S.-origin “technology” or “software” that requires a written assurance as a supporting document for a license, as defined in paragraph (o)(3)(i) of supplement no. 2 to part 748 of the EAR, or as a precondition for the use of License Exception TSR at § 740.6 of the EAR; and

(B) The foreign-produced item is subject to national security controls as designated in the applicable ECCN of the Commerce Control List in part 774 of the EAR.

(ii) Product of a complete plant or 'major component' of a plant that is a “direct product.” A foreign-produced item meets the product scope of this paragraph if it meets both of the following conditions:

(A) The foreign-produced item is a “direct product” of a complete plant or 'major component' of a plant that itself is the “direct product” of U.S.-origin “technology” that requires a written assurance as a supporting document for a license or as a precondition for the use of License Exception TSR in § 740.6 of the EAR; and

(B) The foreign-produced item is subject to national security controls as designated on the applicable ECCN of the Commerce Control List at part 774 of the EAR.

(2) Country scope of National Security FDP rule. A foreign-produced item meets the country scope of this paragraph if its destination is listed in Country Group D:1, E:1, or E:2 (See supplement no.1 to part 740 of the EAR).

(c) 9x515 FDP rule. A foreign-produced item is subject to the EAR if it meets both the product scope in paragraph (c)(1) of this section and the country scope in paragraph (c)(2) of this section.

(1) Product scope of 9x515 FDP rule. The product scope applies if a foreign-produced item meets the conditions of either paragraph (c)(1)(i) or (ii) of this section.

(i) “Direct product” of “technology” or “software.” A foreign-produced item meets the product scope of this paragraph if it meets both of the following conditions:

(A) The foreign-produced item is the “direct product” of U.S.-origin “technology” or “software” that is specified in ECCN 9D515 or 9E515; and

(B) The foreign-produced item is specified in a 9x515 ECCN.

(A) The foreign-produced item is a “direct product” of a complete plant or any 'major component' of a plant that itself is the “direct product” of U.S.-origin “technology” specified in ECCN 9E515; and

(B) The foreign-produced item is specified in a 9x515 ECCN.

(2) Country scope of 9x515 FDP rule. A foreign produced item meets the country scope of this paragraph if its destination is listed in Country Group D:5, E:1, or E:2 (see supplement no. 1 to part 740 of the EAR).

(d) “600 series” FDP rule. A foreign-produced item is subject to the EAR if it meets both the product scope in paragraph (d)(1) of this section and the country scope in paragraph (d)(2) of this section.

Note 1 to paragraph (d) introductory text:

As described in the CCL, ECCN 0A919 is included in this paragraph because it includes the “direct product” of “600 series” “technology” or “software”.

(1) Product scope of “600 series” FDP rule. The product scope applies if a foreign-produced item meets the conditions of either paragraph (d)(1)(i) or (ii) of this section.

(i) “Direct product” of “technology” or “software.” A foreign-produced item meets the product scope of this paragraph if it meets both of the following conditions:

(A) The foreign-produced item is the “direct product” of U.S.-origin “technology” or “software” that is specified in a “600 series” ECCN; and

(B) The foreign-produced item is specified in a “600 series” ECCN or ECCN 0A919.

(ii) Product of a complete plant or 'major component' of a plant that is a “direct product.” Foreign-produced items meet the product scope of this paragraph if they meet both of the following conditions:

(A) The foreign-produced item is the “direct product” of a complete plant or 'major component' of a plant that itself is the “direct product” of U.S.-origin “technology” that is specified in a “600 series” ECCN; and

(B) The foreign produced item is specified in a “600 series” ECCN.

(2) Country scope of “600 series” FDP rule. A foreign-produced item meets the country scope of this paragraph if it is destined to a country listed in Country Group D:1, D:3, D:4, D:5, E:1, or E:2 (see supplement no.1 to part 740 of the EAR).

(e) Entity List FDP rule. A foreign-produced item is subject to the EAR if it meets the product scope and end-user scope in either Entity List FDP rule footnote 1 provision in paragraph (e)(1) of this section or the Entity List FDP rule Footnote 4 provision in paragraph (e)(2) of this section.

(1) Entity List FDP rule: Footnote 1. A foreign-produced item is subject to the EAR if it meets both the product scope in paragraph (e)(1)(i) of this section and the end-user scope in paragraph (e)(1)(ii) of this section. See § 744.11(a)(2)(i) of the EAR for license requirements, license review policy, and license exceptions applicable to foreign-produced items that are subject to the EAR pursuant to this paragraph (e)(1).

(i) Product Scope Entity List FDP rule: Footnote 1. The product scope applies if a foreign-produced item meets the conditions of either paragraph (e)(1)(i)(A) or (B) of this section.

(A) “Direct product” of “technology” or “software.” A foreign-produced item meets the product scope of this paragraph (e)(1)(i)(A) if the foreign-produced item is a “direct product” of “technology” or “software” subject to the EAR and specified in ECCN 3D001, 3D991, 3E001, 3E002, 3E003, 3E991, 4D001, 4D993, 4D994, 4E001, 4E992, 4E993, 5D001, 5D991, 5E001, or 5E991 of the Commerce Control List (CCL) in supplement no. 1 to part 774 of the EAR; or

(B) Product of a complete plant or 'major component' of a plant that is a “direct product.” A foreign-produced item meets the product scope of this paragraph if the foreign-produced item is produced by any complete plant or 'major component' of a plant that is located outside the United States, when the complete plant or 'major component' of a plant, whether made in the U.S. or a foreign country, itself is a “direct product” of U.S.-origin “technology” or “software” that is specified in ECCN 3D001, 3D991, 3E001, 3E002, 3E003, 3E991, 4D001, 4D993, 4D994, 4E001, 4E992, 4E993, 5D001, 5D991, 5E001, or 5E991 of the CCL.

Note 2 to paragraph (e)(1)(i):

A foreign-produced item includes any foreign-produced wafer whether finished or unfinished.

(ii) End-user scope of the Entity List FDP rule: Footnote 1. A foreign-produced item meets the end-user scope of this paragraph (e)(1)(ii) if there is “knowledge” that:

(A) Activities involving Footnote 1 designated entities. The foreign-produced item will be incorporated into, or will be used in the “production” or “development” of any “part,” “component,” or “equipment” produced, purchased, or ordered by any entity with a footnote 1 designation in the license requirement column of the Entity List in supplement no. 4 to part 744 of the EAR; or

(B) Footnote 1 designated entities as transaction parties. Any entity with a footnote 1 designation in the license requirement column of the Entity List in supplement no. 4 to part 744 of the EAR is a party to any transaction involving the foreign-produced item, e.g., as a “purchaser,” “intermediate consignee,” “ultimate consignee,” or “end-user.”

(2) Entity List FDP rule: Footnote 4. A foreign-produced item is subject to the EAR if it meets both the product scope in paragraph (e)(2)(i) of this section and the end-user scope in paragraph (e)(2)(ii) of this section. See § 744.11(a)(2)(ii) of the EAR for license requirements, license review policy, and license exceptions applicable to foreign-produced items that are subject to the EAR pursuant to this paragraph (e)(2).

(i) Product Scope Entity List FDP rule: Footnote 4. The product scope applies if a foreign-produced item meets the conditions of either paragraph (e)(2)(i)(A) or (B) of this section.

(A) “Direct product” of “technology” or “software.” The foreign-produced item is a “direct product” of “technology” or “software” subject to the EAR and specified in ECCN 3D001, 3D991, 3E001, 3E002, 3E003, 3E991, 4D001, 4D993, 4D994, 4E001, 4E992, 4E993, 5D001, 5D002, 5D991, 5E001, 5E002, or 5E991 of the CCL; or

(ii) End user scope of the Entity List FDP rule: Footnote 4. A foreign-produced item meets the end-user scope of this paragraph (e)(2)(ii) if there is “knowledge” that:

(A) Activities involving Footnote 4 designated entities. The foreign-produced item will be incorporated into, or will be used in the “production” or “development” of any “part,” “component,” or “equipment” produced, purchased, or ordered by any entity with a footnote 4 designation in the license requirement column of the Entity List in supplement no. 4 to part 744 of the EAR; or

(B) Footnote 4 designated entities as transaction parties. Any entity with a footnote 4 designation in the license requirement column of the Entity List in supplement no. 4 to part 744 of the EAR is a party to any transaction involving the foreign-produced item, e.g., as a “purchaser,” “intermediate consignee,” “ultimate consignee,” or “end-user.”

(f) Russia/Belarus/Temporarily occupied Crimea region of Ukraine FDP rule. A foreign-produced item is subject to the EAR if it meets both the product scope in paragraph (f)(1) of this section and the destination scope in paragraph (f)(2) of this section. See § 746.8 of the EAR for license requirements, license review policy, and license exceptions applicable to foreign-produced items that are subject to the EAR pursuant to this paragraph (f).

(1) Product scope of Russia/Belarus/Temporarily occupied Crimea region of Ukraine FDP rule. The product scope applies if a foreign-produced item meets the conditions of either paragraph (f)(1)(i) or (ii) of this section.

(i) “Direct product” of “technology” or “software.” A foreign-produced item meets the product scope of this paragraph (f)(1)(i) if the foreign-produced item meets both of the following conditions:

(A) The foreign-produced item is the “direct product” of U.S.-origin “technology” or “software” subject to the EAR that is specified in any ECCN in product groups D or E of the CCL; and

(B) The foreign-produced item is specified in any ECCN on the CCL or in supplement no. 6 or 7 to part 746 of the EAR; or

(ii) Product of a complete plant or 'major component' of a plant that is a “direct product.” A foreign-produced item meets the product scope of this paragraph (f)(1)(ii) if it meets both of the following conditions:

(A) A foreign-produced item meets the product scope of this paragraph if the foreign-produced item is produced by any complete plant or 'major component' of a plant that is located outside the United States, when the complete plant or 'major component' of a plant, whether made in the United States or a foreign country, itself is a “direct product” of U.S.-origin “technology” or “software” that is specified in any ECCN in product groups D or E of the CCL; and

(B) The foreign-produced item is specified in any ECCN on the CCL or in supplement no. 6 or 7 to part 746 of the EAR.

(2) Destination scope of the Russia/Belarus/Temporarily occupied Crimea region of Ukraine FDP rule. A foreign-produced item meets the destination scope of this paragraph (f)(2) if there is “knowledge” that the foreign-produced item is destined to Russia, Belarus, or the temporarily occupied Crimea region of Ukraine or will be incorporated into or used in the “production” or” development” of any “part,” “component,” or “equipment” specified in any ECCN on the CCL or in supplement no. 6 or 7 to part 746 of the EAR and produced in or destined to Russia, Belarus, or the temporarily occupied Crimea region of Ukraine.

(g) Russia/Belarus-Military End User and Procurement FDP rule. A foreign-produced item is subject to the EAR if it meets both the product scope in paragraph (g)(1) of this section and the end-user scope in paragraph (g)(2) of this section. See § 746.8 of the EAR for license requirements, license review policy, and license exceptions applicable to foreign-produced items that are subject to the EAR pursuant to this paragraph (g).

(1) Product Scope of Russia/Belarus-Military End User and Procurement FDP rule. The product scope applies if a foreign-produced item meets the conditions of either paragraph (g)(1)(i) or (ii) of this section.

(i) “Direct product” of “technology” or “software.” A foreign-produced item meets the product scope of this paragraph (g)(1)(i) if the foreign-produced item is a “direct product” of “technology” or “software” subject to the EAR and specified in any ECCN in product groups D or E in any categories of the CCL; or

(ii) Product of a complete plant or 'major component' of a plant that is a “direct product.” A foreign-produced item meets the product scope of this paragraph if the foreign-produced item is produced by any complete plant or 'major component' of a plant that is located outside the United States, when the complete plant or 'major component' of a plant, whether made in the United States or a foreign country, itself is a “direct product” of U.S.-origin “technology” or “software” that is specified in any ECCN in product groups D or E in any categories of the CCL.

(2) End-user scope of the Russia/Belarus-Military End User and Procurement FDP rule. A foreign-produced item meets the end-user scope of this paragraph (g)(2) if there is “knowledge” that:

(i) Activities involving footnote 3 designated entities. The foreign-produced item will be incorporated into, or used in the “production” or “development” of any “part,” “component,” or “equipment” produced, purchased, or ordered by any entity with a footnote 3 designation in the license requirement column of the Entity List in supplement no. 4 to part 744 of the EAR; or

(ii) Footnote 3 designated entities as transaction parties. Any entity with a footnote 3 designation in the license requirement column of the Entity List in supplement no. 4 to part 744 of the EAR is a party to any transaction involving the foreign-produced item, e.g., as a “purchaser,” “intermediate consignee,” “ultimate consignee,” or “end-user.”

Note 3 to paragraph (g):

Footnote 3 may be added to an entity that the End User Review Committee has determined to be either a Russian or Belarusian 'military end user' as defined in § 744.21 of the EAR, or a Russian or Belarusian Procurement Entity that poses a significant risk of involvement in the supply or diversion of items subject to the EAR to procurement networks for Russia's or Belarus's defense industry or intelligence services.

(h) Advanced computing FDP rule. A foreign-produced item is subject to the EAR if it meets both the product scope in paragraph (h)(1) of this section and the destination scope in paragraph (h)(2) of this section. See § 742.6(a)(6) of the EAR for license requirements and license exceptions and § 742.6(b)(10) for license review policy applicable to foreign-produced items that are subject to the EAR under this paragraph (h).

(1) Product scope of advanced computing FDP rule. The product scope applies if a foreign-produced item meets the conditions of either paragraph (h)(1)(i) or (ii) of this section.

(i) “Direct product” of “technology” or “software.” A foreign-produced item meets the product scope of this paragraph (h) if it meets both the following conditions:

(A) The foreign-produced item is the “direct product” of “technology” or “software” subject to the EAR and specified in 3D001, 3D991, 3E001, 3E002, 3E003, 3E991, 4D001, 4D090, 4D993, 4D994, 4E001, 4E992, 4E993, 5D001, 5D002, 5D991, 5E001, 5E991, or 5E002 of the CCL; and

(B) The foreign-produced item is:

(1) Specified in ECCN 3A090, 3E001 (for 3A090), 4A090, or 4E001 (for 4A090) of the CCL; or

(2) An integrated circuit, computer, “electronic assembly,” or “component” specified in ECCN 3A001.z, 4A003.z, 4A004.z, 4A005.z, 5A002.z, 5A004.z, or 5A992.z.

(ii) Product of a complete plant or 'major component' of a plant that is a “direct product.” A foreign-produced item meets the product scope of this paragraph (h) if it meets both of the following conditions:

(A) The foreign-produced item is produced by any complete plant or 'major component' of a plant that is located outside the United States, when the plant or 'major component' of a plant, whether made in the United States or a foreign country, itself is a “direct product” of U.S.-origin “technology” or “software” that is specified in ECCN 3D001, 3D991, 3E001, 3E002, 3E003, 3E991, 4D001, 4D090, 4D993, 4D994, 4E001, 4E992, 4E993, 5D001, 5D991, 5E001, 5E991, 5D002, or 5E002 of the CCL; and

(B) The foreign-produced item is:

(1) Specified in ECCN 3A090, 3E001 (for 3A090), 4A090, or 4E001 (for 4A090) of the CCL; or

(2) An integrated circuit, computer, “electronic assembly,” or “component” specified in ECCN 3A001.z, 4A003.z, 4A004.z, 4A005.z, 5A002.z, 5A004.z, or 5A992.z.

(2) Destination or end use scope of the advanced computing FDP rule. A foreign-produced item meets the destination scope of this paragraph (h)(2) if there is “knowledge” that the foreign-produced item is:

(i) Destined to a destination specified in Country Groups D:1, D:4, or D:5, excluding any destination also specified in Country Groups A:5 or A:6, or will be incorporated into any “part,” “component,” “computer,” or “equipment” not designated EAR99 that is destined to a destination specified in Country Groups D:1, D:4, or D:5, excluding any destination also specified in Country Groups A:5 or A:6, or worldwide to an entity headquartered in, or whose ultimate parent company is headquartered in, either Macau or a destination specified in Country Group D:5; or

(ii) “Technology” “developed” by an entity headquartered in, or whose ultimate parent company is headquartered in, either Macau or a destination specified in Country Group D:5, for the “production” of a mask or an integrated circuit wafer or die.

Note to paragraph (h)(2):

These end-use requirements under paragraph (h) apply when any entity headquartered in, or whose ultimate parent company is headquartered in, either Macau or destination specified in Country Group D:5, is a party to any transaction involving the foreign-produced item, e.g., as a “purchaser,” “intermediate consignee,” “ultimate consignee,” or “end-user.”

(i) “Supercomputer” FDP rule. A foreign-produced item is subject to the EAR if it meets both the product scope in paragraph (i)(1) of this section and the country and end-use scope in paragraph (i)(2) of this section. See § 744.23 of the EAR for license requirement, license review policy, and license exceptions applicable to foreign-produced items that are subject to the EAR pursuant to this paragraph (i).

(1) Product scope. The product scope applies if a foreign-produced item meets the conditions of either paragraph (i)(1)(i) or (ii) of this section.

(i) “Direct product” of “technology” or “software.” The foreign-produced item meets the product scope of this paragraph (i)(1)(i) if the foreign-produced item is a “direct product” of “technology” or “software” subject to the EAR and specified in ECCN 3D001, 3D991, 3E001, 3E002, 3E003, 3E991, 4D001, 4D993, 4D994, 4E001, 4E992, 4E993, 5D001, 5D991, 5E001, 5E991, 5D002, or 5E002 of the CCL; or

(ii) Product of a complete plant or 'major component' of a plant that is a “direct product.” A foreign-produced item meets the product scope of this paragraph if the foreign-produced item is produced by any complete plant or 'major component' of a plant that is located outside the United States, when the complete plant or 'major component' of a plant, whether made in the United States or a foreign country, itself is a “direct product” of U.S.-origin “technology” or “software” that is specified in ECCN 3D001, 3D991, 3E001, 3E002, 3E003, 3E991, 4D001, 4D994, 4E001, 4E992, 4E993, 5D001, 5D002, 5D991, 5E001, 5E002, or 5E991 of the CCL.

(2) Country and end-use scope. A foreign-produced item meets the country and end-use scope of this paragraph (i)(2) if there is “knowledge” that the foreign produced item will be:

(i) Used in the design, “development,” “production,” operation, installation (including on-site installation), maintenance (checking), repair, overhaul, or refurbishing of, a “supercomputer” located in or destined to the PRC or Macau; or

(ii) Incorporated into, or used in the “development,” or “production,” of any “part,” “component,” or “equipment” that will be used in a “supercomputer” located in or destined to the PRC or Macau.

(j) Iran FDP rule. A foreign-produced item is subject to the EAR if it meets both the product scope in paragraph (j)(1) of this section and the destination and end-use scope in paragraph (j)(2) of this section or meets both the product scope in paragraph (j)(1) of this section and the end-user scope in paragraph (j)(3) of this section. See § 746.7 of the EAR for license requirements and license application review policy applicable to foreign-produced items that are subject to the EAR pursuant to this paragraph, as well as certain exclusions from those license requirements.

(1) Product scope of the Iran FDP rule. The product scope applies if a foreign-produced item meets the conditions of either paragraph (j)(1)(i) or (ii) of this section.

(i) “Direct product” of “technology” or “software.” A foreign-produced item meets the product scope of this paragraph (j)(1)(i) if the foreign-produced item meets both of the following conditions:

(A) The foreign-produced item is the “direct product” of U.S.-origin “technology” or “software” subject to the EAR that is specified in any ECCN in product groups D or E in Categories 3 through 9 of the CCL; and

(B) The foreign-produced item is identified in supplement no. 7 to part 746 of the EAR or is specified in any ECCN on the CCL in Categories 3 through 9 of the CCL; or

(ii) Product of a complete plant or `major component' of a plant that is a “direct product.” A foreign-produced item meets the product scope of this paragraph (j)(1)(ii) if it meets both of the following conditions:

(A) The foreign-produced item is produced by any plant or `major component' of a plant that is located outside the United States, when the plant or 'major component' of a plant, whether made in the United States or a foreign country, itself is a “direct product” of U.S.-origin “technology” or “software” subject to the EAR that is specified in any ECCN in product groups D or E in Categories 3 through 9 of the CCL; and

(B) The foreign-produced item is identified in supplement no. 7 to part 746 of the EAR or is specified in any ECCN on the CCL in Categories 3 through 9 of the CCL.

(2) Destination and end-use scope of the Iran FDP rule. A foreign-produced item meets the scope of this paragraph (j)(2) if there is “knowledge” that the foreign-produced item:

(i) Is destined to Iran; or

(ii) Will be incorporated into or used in the “production” or “development” of any “part,” “component,” or “equipment,” including any modified or designed “components,” “parts,” “accessories,” and “attachments” therefor, identified in supplement no. 7 to part 746 of the EAR or specified in any ECCN in Categories 3 through 9 of the CCL, and located in or destined to Iran.

(3) End-user scope of the Iran FDP rule. A transaction meets the end-user scope of this paragraph (j)(3) if the reexporter or transferor has “knowledge” that the Government of Iran is a party to any transaction involving the foreign-produced item, e.g., as a “purchaser,” “intermediate consignee,” “ultimate consignee,” or “end-user.”

[87 FR 6024, Feb. 3, 2022, as amended at 87 FR 12236, Mar. 3, 2022; 87 FR 13055, Mar. 8, 2022; 87 FR 22131, Apr. 14, 2022; 87 FR 57078, Sept. 16, 2022; 87 FR 62195, Oct. 13, 2022; 88 FR 2824, Jan. 18, 2023; 88 FR 12153, Feb. 27, 2023; 88 FR 33428, May 23, 2023; 88 FR 73488, Oct. 25, 2023; 89 FR 60564, July 26, 2024; 89 FR 68542, Aug. 27, 2024]

authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601

source: 61 FR 12746, Mar. 25, 1996, unless otherwise noted.

cite as: 15 CFR 734.9