Foreign Direct Product Rule
A rule that brings a product made outside the United States under US export law because it is the output of specified US technology or software.
How it works
The rule is defined in section 734.9 of the US Export Administration Regulations. A product made abroad becomes subject to US law if it is the direct output of specified US technology or software, or if it is the product of a plant, or a major component of a plant, that is itself such an output. The product need not contain a single American part; the origin of the machine or the design software is enough.
The section is not one rule but a series of paragraphs, each with its own scope. Separate paragraphs cover defence articles, the Entity List, Russia and Belarus, advanced computing and AI model weights. For a product to fall within scope it must satisfy both the product scope of the relevant paragraph and the destination or end-user scope at the same time.
There are two traps in applying it. First, being subject to the regulations does not automatically require a licence; the bureau states in its own guidance that not every covered transaction needs a licence and that some of those that do may use licence exceptions. Second, the section changes often: the Entity List paragraph was added in 2020 and the provisions were consolidated into a single section in 2022. Whether a given shipment is in scope can therefore only be verified against the current text.
Why it matters here
This rule converts export control from a national power into one that reaches across borders. Because Washington can target not its own companies but foreign firms producing on American machines, manufacturers in Japan, the Netherlands and South Korea end up setting their export policy to Washington's timetable. For Türkiye the meaning is that a producer using US-origin machine tools, design software or measurement equipment can fall within scope when selling to a sanctioned buyer, even with no American part in the product.