The Department of Commerce’s Bureau of Industry and Security (BIS) have closed a Biden-era loophole that allowed a handful of foreign companies to export semiconductor manufacturing equipment and technology to China license-free. Now these companies will need to obtain licenses to export their technology, putting them on par with their competitors.
The loophole is known as the Validated End-User (VEU) program. In 2023, the Biden Administration expanded the VEU program to allow a select group of foreign semiconductor manufacturers to export most U.S.-origin goods, software, and technology license-free to manufacture semiconductors in China. No U.S.-owned fab has this privilege — and now, following today’s decision, no foreign-owned fab will have it either.
Former VEU participants will have 120 days following publication of the rule in the Federal Register to apply for and obtain export licenses. Going forward, BIS intends to grant export license applications to allow former VEU participants to operate their existing fabs in China. However, BIS does not intend to grant licenses to expand capacity or upgrade technology at fabs in China.
Department of Commerce Closes Export Controls Loophole for Foreign-Owned Semiconductor Fabs in China
The Department of Commerce’s Bureau of Industry and Security (BIS) also published a rule easing licensing requirements for civilian exports to Syria.
The rule implements the policy on Syria established in Executive Order 14312, “Providing for the Revocation of Syria Sanctions” (June 30, 2025). EO 14312 declared the United States’ commitment to supporting a Syria that is stable, unified, and at peace with itself and its neighbors. EO 14312 called for the removal of sanctions on Syria, and it also issued waivers that allow for the relaxation of export controls on Syria.
As a result of the rule, U.S.-origin goods, software, and technology that have purely civilian uses (i.e., those classified under BIS’s regulations as “EAR99”), as well as consumer communications devices and certain items related to civil aviation, can generally go to Syria without an export license under a license exception. In addition, today’s rule facilitates the approval of licenses for exports to Syria related to telecommunications infrastructure, sanitation, power generation, and civil aviation. All other applications for exports of dual-use items to Syria will be reviewed on a case-by-case basis. BIS will continue to restrict exports when the end-users of items are malign actors, including certain Syrian individuals and entities that remain subject to sanctions.
Commerce Amends EAR Parts 736, 740, 746 to Relax Export Controls for Syria
https://www.bis.gov/press-release/commerce-eases-export-controls-syria
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