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U.S. rule, foreign-produced items destined for entities list

U.S. rule, foreign-produced items destined for entities

The Bureau of Industry and Security (BIS) of the U.S. Commerce Department today released for publication in the Federal Register an interim final rule along with a request for comments concerning amendments to the “general prohibition three” (that is, the foreign-produced direct product rule).


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The interim final rule imposes a new control over certain foreign-produced items that are destined to a designated entity on the entity list. Comments concerning implications of this rule are requested and are due on or before July 14, 2020.

Read the BIS interim final rule [PDF 472 KB]

All U.S. origin items are subject to control under the Export Administration Regulations (EAR). In addition, foreign-produced items are subject to the EAR:

  • If they contain a certain percentage of controlled U.S.-origin content
  • If the foreign-produced item is subject to the foreign-produced direct product rule

The interim final rule applies to foreign-produced items based on the following two criteria: (1) the reason for control or classification of the U.S. “technology” or “software”; and (2) when there is knowledge that the foreign-produced item is destined to a designated entity listed on the entity list.

For more information on this topic or to learn more about KPMG’s Trade & Customs Services, contact:

Doug Zuvich
Partner and Global Practice Leader
T: 312-665-1022

John L. McLoughlin
Principal and East Coast Leader
T: 267-256-2614

Andy Siciliano
Partner and National Practice Leader
T: 631-425-6057

Steve Brotherton
Principal and Global Export and Sanctions Leader
T: 415-963-7861

Luis (Lou) Abad
Principal, Washington National Tax
T: 212-954-3094

Irina Vaysfeld
T: 212-872-2973

Amie Ahanchian
T: 202-533-3247

Christopher Young
T: 312-665-3229

Gisele Belotto
Managing Director
T: 305-913-2779

George Zaharatos
T: 404-222-3292

Andy Doornaert
Managing Director
T: 313-230-3080

Jessica Libby
Managing Director
T: 612-305-5533

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