Image Source : China Visual

BEIJING, January 18 (TMTPOST) —— The Bureau of Industry and Security (BIS) on Tuesday updated export controls which were placed on China's chip industry last October by adding Macau as a destination, according to an official announcement posted on the website of the Department of Commerce.

The update took effect immediately.  According to the BIS announcement, the October 7, 2022 export control policy also applies to Macao, including the Foreign Direct Product (FDP) Rules on the export of advanced computing and supercomputing products technology, export restrictions on related production equipment, restrictions on "U.S. person" and temporary exemptions for certain foreign companies in China.

But Macau was not included in the October 7 export control, according to Dai Menghao, a consultant in the compliance department of King & Wood.  For example, companies based in Macao would not be subject to export control.  Macau was added to the list after the update on Tuesday, subject to the same rules as mainland China and Hong Kong.

Dai pointed out that the U.S. Congress passed the so-called "Hong Kong Autonomy Act" in July 2020, unilaterally revoking Hong Kong's independent status as a customs territory.  Therefore, Mainland China and Hong Kong were treated the same in export control, while Macao was subject to separate control requirements.

BIS also mentioned on October 28, 2022, that according to the October 7 control policy, "BIS regards Macau as a destination distinct from China and therefore not subject to China-specific licensing requirements.  However, exporters and re-exporters are encouraged to conduct due diligence and be aware of red flags when shipping to Macau."

The BIS issued a 139-page new export control regulation on October 7, 2022, which uses quantitative indicators on chip computing power, bandwidth, and manufacturing process to restrict the export of relevant US companies to China.  It refers to many fields such as high-end chip manufacturing, design, and equipment in China, and directly impacts the development of artificial intelligence (AI) and supercomputer-related industries in China.