BIS Receiving Questions About 'Major Component' Definition in FDP Rule

The Bureau of Industry and Security has been receiving “a lot” of questions about what is considered a “major component” under the agency’s foreign direct product rule, a Commerce Department official said. Some exporters have asked BIS to issue a list of examples of major components for the purposes of the FDP rule, the official said, which restricts certain foreign-produced items when they are produced by a plant or by a “major component” of a plant that is a direct product of certain U.S. technology or software.

The official, speaking during BIS’s annual update conference June 29, said the agency can’t issue a list of components because it would be too expansive. "It’s any of your equipment that is used in the production that's essential to that product,” the official said, speaking on background as part of a conference policy for certain career personel. "So that could be something big. It could be something small … any piece of equipment.” The official said exporters should “look at it all” and conduct an audit. “The way to comply with this is to do an audit of the production line,” the official said.