BIS Publishes Guidance Regarding License Requirements for Advanced Computing Items

The U.S. Department of Commerce Bureau of Industry and Security (BIS) issued guidance on Sunday, May 31, 2026 – a rare weekend release – regarding enforcement of license requirements for certain "advanced computing" items. The guidance clarified that a license is required to export advanced computing items destined to entities headquartered in Country Group D:5 (which includes China) or Macau or to entities with an ultimate parent company headquartered in Country Group D:5 or Macau – even if the entities themselves are located outside Country Group D:5 or Macau.

Background

BIS's guidance comes at a time of uncertainty surrounding the regulatory landscape for certain advanced computing exports. In a May 2025 press release, BIS announced a rescission of the Artificial Intelligence (AI) Diffusion Rule issued in January 2025 under the Biden Administration. Among other new requirements, the AI Diffusion Rule imposed a worldwide license requirement for certain advanced computing integrated circuits. The May 2025 press release stated that BIS would not enforce the AI Diffusion Rule and that "BIS plans to publish a regulation formalizing the rescission and will issue a replacement rule in the future." As of this writing, a replacement rule has not been issued.

Moreover, on May 12, 2026, the U.S. Government Accountability Office (GAO) determined that BIS's announcement of its non-enforcement policy for the AI Diffusion Rule via the May 2025 press release constituted a "rule" under the Congressional Review Act, meaning that the non-enforcement policy cannot formally take effect unless it is submitted to both houses of the U.S. Congress and the Comptroller General of the GAO. Though the practical impact of the GAO decision is likely limited – as the GAO cannot force BIS to enforce certain rules or license requirements – the decision compounded the confusion with respect to the enforcement environment for the export of certain advanced computing items.

BIS Guidance

BIS's guidance clarifies that the advanced computing items originally listed in the pre-existing version of § 744.23(a)(3) of the Export Administration Regulations (EAR) before the implementation of the AI Diffusion Rule (see Nov. 2023 Federal Register Notice) remain subject to a license requirement when destined to entities headquartered in Country Group D:5 or Macau, or to entities with an ultimate parent company headquartered in Country Group D:5 or Macau. Items subject to this license requirement include items classified under Export Control Classification Numbers (ECCNs) 3A090.a, 3A090.b, 4A090.a, 4A090.b and related .z paragraph items.

As BIS explains, the licensing requirement for certain advanced computing items, including the ".a" items, was moved from § 744.23(a)(3) to § 742.6 of the EAR pursuant to the AI Diffusion Rule. After BIS announced its non-enforcement policy of the AI Diffusion Rule, it "received questions as to whether the preexisting license requirement established in November 2023 is still being enforced for '.a' advanced computing items to Country Group D:5 and Macau-headquartered entities located outside of destinations that were subject to a license requirement prior to the AI Diffusion Rule."

The guidance clarifies that a license requirement under the current version of § 742.6(a)(6)(iii)(A) of the EAR continues to apply for these advanced computing items when they are destined for entities headquartered in, or whose ultimate parent company is headquartered in, Country Group D:5 or Macau. This is because the relevant license requirement predates the AI Diffusion Rule, and the non-enforcement policy applies to advanced computing items "only to the extent such items are not for entities headquartered in or that have ultimate parent companies headquartered in Country Group D:5 or Macau" (emphasis added).

The guidance continues: "Bona fide operators of data centers who are otherwise engaged in activities consistent with the EAR are not required to cease the ongoing use, storage, disposal, or servicing of advanced computing items because of this guidance, until further notice from BIS." The guidance does not define "bona fide operators" or provide a timeline for when further guidance specific to such operators of data centers may be forthcoming.

Takeaways

As a practical matter, exporters and resellers should not treat BIS's non-enforcement policy of the AI Diffusion Rule as a blanket safe harbor for transactions involving advanced computing items. Where the end user is an entity headquartered in Country Group D:5 or Macau or where the entity's ultimate parent company is headquartered in one of those jurisdictions, companies must continue to obtain an export license before proceeding with the transaction.

To ensure compliance, exporters and resellers of advanced computing items should conduct thorough due diligence on the corporate structure and headquarters location of customers and end users. A transaction that might otherwise appear to benefit from the non-enforcement policy could still trigger a license requirement if the ultimate parent company is headquartered in China or another Country Group D:5 jurisdiction, even if the immediate customer is located elsewhere.

Holland & Knight's International Trade Group will continue to monitor developments in this space and provide updates as they become available.