BIS Releases More FAQs on the Connected Vehicles Rule

The FAQs can be found here.

We have covered the Rule in greater depth in our previous alerts, Taking Stock – Summary of BIS Actions From Fall 2024, and Peek at What Is Next Under the Trump Administration, BIS Issues Long-Awaited FAQs on the Connected Vehicles Rule — But Questions About the Scope of the Rule Still Remain, and BIS Issues Two General Authorizations and More FAQs on the Connected Vehicles Rule.

These FAQs provide further clarification on the rule, particularly concerning what constitutes covered software and Vehicle Connectivity System (VCS) hardware. While many of the clarifications were already included in the Rule’s text, the FAQs offer additional insights.

Key General Clarifications

• Corporate Ownership and Foreign Adversaries: One of the new FAQs specifies that a corporation will not be deemed owned, controlled, or directed by a foreign adversary solely based on the nationality of its employees or contractors.

• Compliance Application and Reporting System (CARS): Another FAQ notes that this system is designated for US persons, specifically VCS Hardware importers and connected vehicle manufacturers, to submit Declarations of Conformity, Specific Authorization Applications, and Advisory Opinion Requests. Foreign entities with US subsidiaries should have their subsidiaries register for CARS. Law firms and other external representatives should not register for CARS, but once a VCS Hardware importer or connected vehicle manufacturer has created a CARS account, the account creator may add external representatives as users.

Clarifications to the Definitions of “Covered Software” and “VCS Hardware”

• Exclusions From VCS Hardware: Items not considered VCS Hardware include:

  • Non-software-enabled active components (e.g., antenna tuners, power amplifiers, low noise amplifiers, mixers, non-automatic tuners, memory, ethernet integrated circuits (IC), audio amplifiers, and crystal/oscillators).

  • Passive components (e.g., low pass filters, high pass filters, band pass filters, surface acoustic wave filters, matching networks, diplexers, duplexers, passive radio frequency switches, and attenuators).

  • Power supply or management components (e.g., battery unit boards, power management IC, and power amplifier).

  • Components not directly enabling radio frequency communication (e.g., controller area network IC).

• Infotainment Systems: These systems likely fall under the Rule if they include connectivity subcomponents like bluetooth or wi-fi modules. However, subcomponents used solely for entertainment or internal networking that do not enable communication over 450 MHz are not subject to the Rule.

• Assembly, Packing, and Testing: Activities related to the assembly, packing, and testing of connected vehicles and VCS Hardware may be considered as “designed, developed, manufactured, or supplied” under the Rule, and supply chain due diligence should therefore also cover these elements.

• Aftermarket Hardware Devices: Unless exempted, aftermarket devices that directly fulfill VCS Functions are subject to the prohibition on VCS Hardware. However, items whose primary function does not enable vehicle connectivity (e.g. mobile phones paired with a connected vehicle) are not captured by the VCS Hardware prohibition.

We will continue to monitor any updates to the Rule and FAQs. In the meantime, if you have any questions, please contact Sylvia Costelloe or Maya S. Cohen