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On October 7, 2022, the U.S. Department of Commerce's Bureau of Industry and Security (BIS) implemented new export controls on advanced computing and semiconductor manufacturing items destined for the People's Republic of China (PRC). Congress believes that China is attempting to exploit innovative technology to advance malicious surveillance technologies.
As a result of these controls, there has been a significant reduction in the export of advanced computing and semiconductor manufacturing components to China, with only a few exceptions. To address this issue, the U.S. government has been creating special exceptions through new licenses or individual agreements with companies that have supply chains in China but do not necessarily serve the country directly.
BIS has introduced a new License Type Code C66, known as the "Supply Chain Authorization Letter" (SCAL). These letters are issued by the BIS Deputy Assistant Secretary in response to specific requests for assistance in alleviating actual or potential supply chain disruptions. Each business that receives a SCAL is provided with specific terms and conditions that must be met, and exporters may face penalties if they fail to comply with these requirements. BIS has recently made updates to their Automated Export System to prevent fatal errors and reporting delays when utilizing a C66 letter.
Are you unsure of how to acquire a Supply Chain Authorization Letter? Do you have a SCAL and are confused about what it authorizes you to do? Do you have any general questions about using a SCAL? Contact our office today at 917-546-6997.
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