Sanctions Evasion Reference

Foreign direct product rule

A rule making a foreign-made item subject to US export controls because it is the direct product of US-origin technology, software or production equipment.

also known as

FDPR

reviewed

2026-08-20

Where de minimis looks at US content inside the item, the foreign direct product rule looks at US technology behind it. A chip designed with US electronic design automation software, or fabricated on a tool made in the United States, can fall under US jurisdiction wherever it is made.

Successive expansions of the rule to specific destinations and entities have substantially widened the set of goods for which a third-country supplier needs a US licence, and have correspondingly increased the value of intermediaries who will misdeclare the end destination.

Where this term is used

  • What is dual-use re-export diversion? — Buying controlled civil-use goods lawfully in an open market and re-exporting them to a restricted end user, exploiting the fact that the item itself looks entirely ordinary.
  • How are aircraft parts procured in breach of sanctions? — Buying airframe and engine components through intermediaries in unrestricted countries, so that parts for a restricted operator's Western-built fleet arrive with clean paperwork and no airworthiness trail.
  • What is third-country transshipment? — Routing restricted goods through an intermediate country so that the shipment reaching the restricted destination appears to originate somewhere the exporter would have supplied without question.

Related terms

  • De minimis rule — The principle that a foreign-made item becomes subject to US export controls when more than a threshold percentage of its value is US-origin controlled content.
  • Re-export — The onward shipment of a controlled item from the country that first received it to a third country, which may itself require a licence from the original exporting state.
  • Export control — A licensing regime that restricts the export, re-export or transfer of specified goods, software and technology by reference to the item, the destination and the end use.
  • Entity List — A US Bureau of Industry and Security list of parties subject to specific export licence requirements because of activity contrary to national security or foreign policy interests.

Sources

  1. Entity List, Supplement No. 4 to Part 744 of the Export Administration Regulations. U.S. Bureau of Industry and Security, 2026.

All glossary terms