GlossaryEN1 min readUpdated: Jun 26, 2026

Foreign Direct Product Rule

A company ships semiconductors to Asia – manufactured outside the United States but produced using U.S.-licensed technology or equipment.

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Last updated: 26 June 2026Published: 27 January 2026

Source: https://www.bis.gov

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Definition & Explanation

A company ships semiconductors to Asia – manufactured outside the United States but produced using U.S.-licensed technology or equipment. This is precisely where the Foreign Direct Product Rule (FDPR) applies: it subjects goods that are the direct product of U.S. technology or U.S. production equipment to U.S. export controls, regardless of where manufacturing took place or where the transaction occurs. Semiconductors, electronic components, software, and technical data are among the most affected categories. Where a specific end-user or destination country is involved, a licence from the Bureau of Industry and Security (BIS) is required. For freight forwarders and shippers, this means screening every transaction to determine whether supply chain items incorporate U.S.-origin technology that triggers FDPR obligations. Non-compliance carries significant financial penalties and potential debarment from U.S. markets.

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Foreign Direct Product Rule

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Related Terms

De minimis rule

export control decision logic

Returns Management Automation

MFN (Most Favoured Nation)

List Rule of Origin

ASEAN–Japan FTA – Product Listing Rule Verification Clothing

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