Collapse to view only § 231.302 - Contents of notifications; certifications.
- § 231.301 - Procedures for notifying the Secretary of significant transactions.
- § 231.302 - Contents of notifications; certifications.
- § 231.303 - Response to notifications.
- § 231.304 - Initiation of review.
- § 231.305 - Procedures for review.
- § 231.306 - Mitigation of national security risks.
- § 231.307 - Review of actions that may violate the prohibition on certain joint research or technology licensing.
- § 231.308 - Recovery and other remedies.
§ 231.301 - Procedures for notifying the Secretary of significant transactions.
During the 10-year period beginning on the date of the Federal financial assistance award under 15 U.S.C. 4652, the covered entity shall submit a notification to the Secretary regarding any planned significant transactions of the covered entity or members of the affiliated group that may involve the material expansion of semiconductor manufacturing capacity in a foreign country of concern, regardless of whether the covered entity believes the transaction falls within an exception in 15 U.S.C. 4652(a)(6)(C)(ii). A notification must include the information set forth in § 231.302 and be submitted to [email protected].
§ 231.302 - Contents of notifications; certifications.
The notification required by § 231.301 shall be certified by the covered entity's chief executive officer, president, or equivalent corporate officer, and shall contain the following information about the parties and the transaction, which must be accurate and complete:
(a) The covered entity and any member of the affiliated group that is party to the transaction, including for each a primary point of contact, telephone number, and email address.
(b) The identity and location(s) of all other parties to the transaction.
(c) Information, including organizational chart(s), on the ownership structure of parties to the transactions.
(d) A description of any other significant foreign involvement, e.g., through financing, in the transaction.
(e) The name(s) and location(s) of any entity in a foreign country of concern where or at which semiconductor manufacturing capacity may be materially expanded by the transaction.
(f) A description of the transaction, including the specific types of semiconductors currently produced at the facility planned for expansion, the current production technology node (or equivalent information) and semiconductor manufacturing capacity, as well as the specific types of semiconductors planned for manufacture, the planned production technology node, and planned semiconductor manufacturing capacity.
(g) If the covered entity asserts that the transaction involves the material expansion of semiconductor manufacturing capacity that produces legacy semiconductors that will predominately serve the market of a foreign country of concern, documentation as to where the final products incorporating the legacy semiconductors are to be used or consumed, including the percent of semiconductor manufacturing capacity or percent of sales revenue that will be accounted for by use or consumption of the final goods in the foreign country of concern.
(h) If applicable, an explanation of how the transaction meets the requirements, set forth in 15 U.S.C. 4652(a)(6)(C)(ii), for an exception to the prohibition on significant transactions that involve the material expansion of semiconductor manufacturing capacity, including details on the calculations for semiconductor manufacturing capacity and/or sales revenue by the market in which the final goods will be consumed.
§ 231.303 - Response to notifications.
The Secretary will review the notification provided pursuant to § 231.301 for completeness, and may:
(a) Reject the notification, and, if so, inform the covered entity promptly in writing, if:
(1) The notification does not meet the requirements of § 231.302; or
(2) The notification contains apparently false or misleading information;
(b) Request additional information from the covered entity to complete the notification; or
(c) Accept the notification and initiate a review under § 231.304, and, if so, inform the covered entity promptly in writing.
§ 231.304 - Initiation of review.
(a) The Secretary may initiate a review of a transaction:
(1) After accepting a notification pursuant to § 231.303(c); or
(2) Upon the Secretary's own initiative, where the Secretary believes that a transaction may be prohibited. In determining whether to initiate a review, the Secretary may consider all available information, including information submitted by persons other than the covered entity to [email protected].
(b) Where the Secretary initiates review of a transaction under paragraph (a)(2) of this section, the Secretary will notify the covered entity promptly in writing.
(c) The Secretary will consult with the Secretary of Defense and the Director of National Intelligence upon the initiation of a review of any transaction.
§ 231.305 - Procedures for review.
(a) During the review, the Secretary may request additional information from the covered entity. The covered entity shall promptly provide any additional information. The Secretary will determine whether the additional information is sufficient for the Secretary to complete the review, and may seek additional information from the covered entity if necessary. Where the Secretary has determined that the additional information is sufficient to allow the Secretary to complete the review, the Secretary will inform the covered entity in writing. The time periods for any determinations by the Secretary under this section will be tolled from the date on which the request for additional information is sent to the covered entity until the Secretary determines that the response is sufficient to complete the review.
(b) Not later than 90 days after a notification is accepted by the Secretary, or after the Secretary initiates a review under § 231.304(a)(2), and subject to any tolling pursuant to § paragraph (a) of this section, the Secretary will provide the covered entity an initial determination in writing as to whether the transaction would violate § 231.202. The initial determination may include a finding that the covered entity or a member of the affiliated group has violated § 231.202.
(c) If the Secretary's initial determination is that the transaction would violate § 231.202 or that the covered entity or a member of the affiliated group has violated § 231.202 by engaging in a prohibited significant transaction, then:
(1) The covered entity may within 14 days of receipt of the initial determination request that the Secretary reevaluate the initial determination, including by submitting additional information.
(2) If the covered entity does not make such a request within 14 days of receipt of the initial determination, the initial determination will become final. If the covered entity recipient does request a reconsideration of the initial determination, the Secretary will issue the final determination within 60 days after the receipt by the Secretary of the request for reconsideration.
(3) Upon the issuance of a final determination that a transaction would violate § 231.202 or that the covered entity or a member of the affiliated group has violated § 231.202 by engaging in a prohibited significant transaction, the covered entity must cease or abandon the transaction (or, if applicable, ensure that the member of the affiliated group ceases or abandons the transaction), and the covered entity's chief executive officer, president, or equivalent corporate official, must provide a signed letter electronically to [email protected] within 45 days of the final determination certifying that the transaction has ceased or been abandoned. Such letter must certify, under the penalties provided in the False Statements Accountability Act of 1996, as amended (18 U.S.C. 1001), that the information in the letter is accurate and complete.
(d) Unless recovery is waived pursuant to § 231.306, a violation of § 231.202 for engaging in a prohibited significant transaction or failing to cease or abandon a planned significant transaction that the Secretary has determined would be in violation of § 231.202 will result in the recovery of the full amount of the Federal financial assistance provided to the covered entity, which amount will be a debt owed to the U.S. Government.
(e) The running of any deadline or time limitation for the Secretary will be suspended during a lapse in appropriations.
§ 231.306 - Mitigation of national security risks.
If the Secretary, in consultation with the Secretary of Defense and the Director of National Intelligence, determines that a covered entity or member of the affiliated group is planning to undertake or has undertaken a significant transaction that violates or would violate § 231.202, the Secretary may seek to take measures in connection with the transaction to mitigate the risk to national security. Such measures may include the negotiation of an amendment to the required agreement (a “mitigation agreement”) with the covered entity to mitigate the risk to national security in connection with the transaction. The Secretary has discretion to waive, in whole or part, recovery of the Federal financial assistance provided to the covered entity for violation of § 231.305(d) in circumstances where an appropriate mitigation agreement has been entered into and complied with by the covered entity. If a covered entity fails to comply with the mitigation agreement or if other conditions in the mitigation agreement are violated, the Secretary may recover the full amount of the Federal financial assistance provided to the covered entity.
§ 231.307 - Review of actions that may violate the prohibition on certain joint research or technology licensing.
(a) The Secretary may initiate a review of any joint research or technology licensing the Secretary believes may be prohibited by § 231.203. In determining whether to initiate a review, the Secretary may consider all available information, including information submitted by persons other than a covered entity to [email protected].
(b) If the Secretary opens an initial review, the Secretary will notify the covered entity in writing and may request additional information from the covered entity. The covered entity shall provide the additional information to the Secretary within three business days, or within a longer time frame if the covered entity requests in writing and the Secretary grants that request in writing.
(c) The Secretary may make an initial determination as to whether the covered entity violated § 231.203.
(d) If the Secretary's initial determination is that the covered entity did not violate § 231.203, the Secretary shall inform the covered entity in writing and close the review.
(e) If the Secretary's initial determination is that the covered entity violated § 231.203, the Secretary will provide that initial determination to the covered entity in writing.
(1) The covered entity may within 14 days of receipt of the initial determination request that the Secretary reevaluate the initial determination, including by submitting additional information.
(2) If the covered entity does not make such a request within 14 days of receipt of the initial determination, the initial determination will become final. If the covered entity does request a reconsideration of the initial determination, the Secretary will issue the final determination within 45 days of the initial determination.
If the Secretary makes a final determination that an action violated § 231.203, the Secretary will recover the full amount of the Federal financial assistance provided to the covered entity, which will be a debt owed to the U.S. Government.
§ 231.308 - Recovery and other remedies.
(a) Interest on a debt under § 231.305 or § 231.307 will be calculated from the date on which the Secretary provides a final notification that an action violated § 231.202 or § 231.203.
(b) The Secretary may take action to collect a debt under § 231.305 or § 231.307 if such debt is not paid within the time prescribed by the Secretary in the required agreement or mitigation agreement. In addition or instead, the matter may be referred to the Department of Justice for appropriate action.
(c) If the Secretary makes an initial determination that § 231.202 or § 231.203 have been violated, the Secretary may suspend Federal financial assistance.
(d) The recoveries and remedies available under this section are without prejudice to other available remedies, including remedies articulated in the required agreement or civil or criminal penalties.