US pushes Netherlands, others to tighten export curbs

A top Department of Commerce official has expressed dissatisfaction with the alignment of allies with US semiconductor export control policies. “We can’t have a situation where other countries undermine US export controls by backfilling,” Undersecretary Jeffrey Kessler told a congressional hearing (via Nikkei). Kessler threatened with unilateral action if countries including the Netherlands and Japan don’t fall in line.

The Dutch government has implemented a series of increasingly restrictive export policies on semiconductor manufacturing equipment over the past years, primarily affecting ASML and ASM. It’s generally understood that the US has pushed for these measures and, evidently, continues to do so. Kessler wasn’t specific about which US curbs allied nations aren’t aligning with. One possibility is the service and repair of equipment on Chinese soil, which the Dutch government reportedly continues to allow while the US government doesn’t.

Through the so-called Foreign-Direct Product Rule (FDPR), the US assumes control of the flow of foreign technology. It has been used before to curb ASML’s business in China. In due course, the Dutch government copied this restriction.