November 3, 2022

Got Mail: Commerce Sends Mandatory Surveys to U.S. Microelectronics Companies

Holland & Knight Alert
Robert A. Friedman | Andrew K. McAllister | Dariya V. Golubkova | Mackenzie A. Zales | Sarah K. Hubner

Highlights

  • The U.S. Department of Commerce's Bureau of Industry and Security is conducting a legally mandated assessment of the U.S. microelectronics industrial base.
  • Domestic designers, manufacturers and/or distributors of microelectronics that receive the Microelectronic Industrial Base Survey have 60 days to respond.
  • Failure to comply with the survey request may result in civil and criminal penalties.

Consistent with the Biden Administration's continued focus on the domestic microelectronics and semiconductor industry, the U.S. Department of Commerce's Bureau of Industry and Security (BIS), Office of Technology Evaluation (OTE) is completing a comprehensive assessment of the U.S. microelectronics industrial base (MEIB Assessment).1 The MEIB Assessment is part of the U.S. government's initiative to promote U.S. leadership in the microelectronics sector and secure the underlying supply chains and follows other like initiatives (e.g., review of semiconductor manufacturing under the "America's Supply Chains" Executive Order).

To support the MEIB Assessment, the OTE sent surveys to domestic market participants aimed at better understanding the domestic microelectronics network, its role in supporting the defense industrial base and global supply chain exposures. Within the Microelectronics Industrial Base Survey (Survey), BIS specifically requires businesses to provide information on:

  • the structure and interdependencies of organizations that participate in the U.S. microelectronics industrial base
  • supply chain deficiencies and disruptions
  • foreign sourcing and dependencies
  • critical minerals and materials

Mandatory Participation

BIS is in the process of sending Survey requests to affected organizations. Those affiliated with the design, production and/or distribution of microelectronics in the U.S. and identified by BIS will be required to participate in this one-time mandatory information collection. Recipients are legally required to complete the Survey within 60 days of receipt. Failure to complete the Survey could result in civil or criminal penalties, including a maximum fine of $10,000, imprisonment of up to one year or both. Voluntary submissions are also allowed but must be filed by Dec. 20, 2022.

BIS estimates the survey will take businesses, on average, 16 hours to complete. Given the scope and length of the Survey, it is prudent to begin collecting the relevant information promptly upon receipt of the Survey. Information furnished to BIS will be deemed confidential and will not be published or disclosed except in accordance with specifically prescribed national security laws.

Importantly, several of the Survey questions inquire about specialized topics that companies may not have confronted previously. For example, the Survey asks whether the company designs, manufactures or distributes any products or services that are export-controlled and whether the company has been impacted by BIS's latest semiconductor export controls rule.2 Many companies have not conducted an export control classification analysis and would therefore benefit from conferring with specialists in advance of responding to BIS.

If your organization needs assistance completing the BIS Microelectronics Industrial Base Survey or has questions regarding how U.S. government policy toward the microelectronics industry may affect the business, please contact the authors or another member of Holland & Knight's International Trade Group.

Notes

1 The MEIB Assessment is being carried out pursuant to congressional mandate under Section 9904 of Title XCIX of the William M. (Mac) Thornberry National Defense Authorization Act of Fiscal Year 2021. Title XCIX, Creating Helpful Incentives to Produce Semiconductors for America, aims to promote U.S. leadership in the microelectronics sector and to secure the U.S. microelectronics supply chain.

2 For more information on BIS's export controls on certain advanced computing items and semiconductor manufacturing items, please see Holland & Knight's previous alert, "Commerce Department Rolls Out Measures to Strengthen Export Controls on China," Oct. 21, 2022.


Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.


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