The BIS red flags for advanced computing chips are two published lists. The first is the eleven transactional and behavioral red flags in the Bureau of Industry and Security’s Industry Guidance to Prevent Diversion of Advanced Computing Integrated Circuits of 13 May 2025, written for sales of items classified under ECCNs 3A090.a and 4A090.a and the associated .z items, such as servers under 5A992.z. The second is the general “Know Your Customer” red-flag list in Supplement No. 3 to Part 732 of the Export Administration Regulations (EAR), which applies to every item subject to the EAR and, in its later entries, speaks directly to advanced computing items and data-center services. A red flag is not a prohibition. Under the supplement, as of 2 November 2026, it is a circumstance the seller must inquire into and either explain or justify; if it cannot, the seller should refrain from the transaction or put the facts to BIS. The table below lists every flag from both sources that bears on a GPU or AI-server order, what it looks like in practice, and the check that closes it.
How the supplement says to handle a red flag
Paragraph (a) of Supplement No. 3 to Part 732 sets out six steps. As of 2 November 2026 they read, in short:
- Decide whether there are red flags. Any abnormal circumstance that suggests the export may be going to an inappropriate end use, end user or destination.
- If there are red flags, inquire. Absent red flags there is no affirmative duty to go behind the customer’s representations. Once a flag is raised there is a duty to check the suspicious circumstances and ask about end use, end user and destination.
- Do not self-blind. Do not cut off the information that comes to the firm in the normal course of business. A policy of avoiding bad information would usually be an aggravating factor in enforcement.
- Employees need to know how to handle red flags. An employee’s knowledge can be imputed to the firm, so there must be a route for it to reach responsible senior officials.
- Re-evaluate after the inquiry. If the flags can be explained or justified, proceed. If they cannot and you proceed, you run the risk of having had “knowledge”.
- Refrain, or advise BIS and wait. If concern remains, do not proceed, or submit the relevant information to BIS as a license application or in another form BIS specifies.
The checks in the table are written so that each one produces a record for steps 2 and 5: what was asked, what was answered, what document supports it.
The checklist
Source wording is condensed; the link in each row goes to the primary text. “G” rows are the eleven new flags in the May 2025 guidance. “S” rows are from Supplement No. 3 to Part 732; the supplement’s flags that concern semiconductor manufacturing equipment, advanced-node fabrication and the “600 series” are left out and listed after the table.
| Red flag | What it looks like in a real order | The check that resolves it |
|---|---|---|
| G1. No advanced computing purchases before October 2022. The customer, domestic or foreign, never received advanced computing ICs or systems containing them before October 2022. May 2025 guidance, flag 1 | A buyer whose first order of current-generation accelerated servers is this one, or whose purchasing history with you starts in 2023. | Record the date of incorporation and the buyer’s purchasing history, corroborated against the registry extract and your own order records. A new buyer is not disqualified; the rest of the file has to carry more weight. |
| G2. A significant increase since October 2022. The customer received such items before October 2022 but its purchases have risen sharply since. May 2025 guidance, flag 2 | A customer that bought eight servers in 2022 and now orders 128, with no visible change in its business. | Ask for the business reason with evidence: revenue, utilisation of the existing cluster, signed customer contracts, the funding that pays for the order. Record each document and its date. |
| G3. A residential address and no other location. Applies where the quantity is inconsistent with personal use. May 2025 guidance, flag 3 | The ship-to or billing address is a house or an apartment and the order is for more than one or two accelerators. | Classify every address on the case as commercial, residential or virtual office. Require the installation address and the name of the operator of that site. |
| G4. Little or no online presence, or the English and non-English websites differ. May 2025 guidance, flag 4 | No website, a domain registered weeks ago, or a non-English site that describes a different business from the English one. | Domain age, site content against the stated line of business, each language version compared, press coverage and job postings. Record every URL with the date it was viewed. |
| G5. Installation address unknown, or headquarters withheld. The delivery or installation address is unknown, or you cannot determine whether the customer or its ultimate parent is headquartered in Country Group D:5 or Macau, or the customer refuses to say. May 2025 guidance, flag 5 | “We will confirm the ship-to later.” An ownership chain that stops at a holding company with no stated headquarters. | Require the installation address and the headquarters of the customer, its parent and its ultimate parent before quoting; compare each with registries and filings. An incomplete answer is itself the flag, and goes in the file as a finding. |
| G6. The consignee is not the kind of business that needs these items. Ultimate consignees or “consign to” parties such as financial institutions, mail centers, freight forwarders, non-electronics retailers or logistics companies. May 2025 guidance, flag 6 | The consignee on the purchase order is a forwarder, a trading company, or a firm whose business has nothing to do with compute. | Name the end user and the installation site on the purchase order and treat forwarders as intermediate consignees only. Ask the consignee what it will do with the items: use them, hold them in stock, resell them, or provide them as a service. |
| G7. Co-located with, or an address similar to, a party on the Consolidated Screening List. May 2025 guidance, flag 7 | The same building or floor as an Entity List company; an address that differs from a listed one by a suite number. | Screen every party and every address against the Consolidated Screening List with fuzzy matching. Disposition each near-match in writing, with the list version and the date. |
| G8. The end user is not a unique storefront. A legal office, a virtual office, a shipping and receiving company. May 2025 guidance, flag 8 | The end user’s address resolves to a registered-agent office or a mail drop. | Address-type check on the end user’s address. Require a physical installation address with a named facility operator, and a statement from that operator sent to you directly. |
| G9. The purchaser’s address is in Country Group D:1, D:4 or D:5 (and not also in A:5 or A:6), so the destination needs a license for these items and the compliance date has passed. May 2025 guidance, flag 9 | A purchaser in a destination that appears in those groups in Supplement No. 1 to Part 740 ordering 3A090 or 4A090 items. | Check every country on the case against the current Country Groups and the current license requirements for the ECCN. Record the license position as the seller’s own determination and refer to counsel where a license may be needed. |
| G10. The data center cannot affirm it has the infrastructure. Power, cooling or physical space to run servers containing advanced ICs. May 2025 guidance, flag 10 | The buyer names a site but the operator will not confirm capacity, or the megawatts the buyer states cannot run the order. | A written attestation from the facility operator, sent to you and not through the buyer, that the end user is authorised to operate there and the site can run this deployment. The guidance also names a site visit, or an independent third-party auditor, as the way to confirm it. |
| G11. An IaaS provider cannot affirm its users are not headquartered in the PRC. Whether or not the provider itself is in China or Macau. May 2025 guidance, flag 11 | A GPU cloud provider that will not describe its subscribers or say where they are headquartered. | A signed statement that no subscriber headquartered in, or with an ultimate parent headquartered in, China or Macau will have access to the items for model training; a subscriber list with headquarters; a commitment to notify you of changes. |
| S1. Reluctant to offer information about the end use. Supp. No. 3 to Part 732, flag 1 | A questionnaire returned with blanks; “R&D purposes” as the entire description of the end use. | Ask for a specific end use in the buyer’s own words, with the workload and who will run it. A generic answer is not accepted. A refusal goes in the file as a finding. |
| S2. The product’s capabilities do not fit the buyer’s line of business. Supp. No. 3 to Part 732, flag 2 | A staffing agency, a jewellery wholesaler or a freight company orders eight-GPU training servers. | Line-of-business check against the registry, the website and any filings. Ask what the workload is and who will operate the systems. |
| S3. The product is incompatible with the technical level of the destination. Supp. No. 3 to Part 732, flag 3 | Rack-scale liquid-cooled systems shipping to a place with no facility that could host them. | Confirm the installation site exists and can run the systems (see G10), and ask who will install and operate them. |
| S4. Little or no business background. Supp. No. 3 to Part 732, flag 4 | A company incorporated this year with no filings, no staff and no references. | Incorporation date, filed accounts, staff and job postings, references from the ecosystem (OEM, facility operator, bank). Weight the rest of the file accordingly. |
| S5. Willing to pay cash for a very expensive item when financing is normal. Supp. No. 3 to Part 732, flag 5 | Full prepayment in cash or cryptocurrency; payment from a third party or from a jurisdiction unrelated to the deal. | Source-of-funds documents, not a bank statement alone. The payer’s identity matched to a party on the case. |
| S6. Unfamiliar with the product’s performance but wants it anyway. Supp. No. 3 to Part 732, flag 6 | The buyer cannot say which model, interconnect or storage it needs, or why this configuration. | A sizing or architecture document from the buyer’s technical lead, and a call with the people who will run the cluster. |
| S7. Routine installation, training or maintenance declined. Supp. No. 3 to Part 732, flag 7 | The buyer refuses on-site installation or support that is included in the price. | Ask why and record the answer. Who will install the systems, and where, belongs in the end-use statement. |
| S8. Vague delivery dates, or out-of-the-way destinations. Supp. No. 3 to Part 732, flag 8 | “Ship when ready, we will advise the address.” Delivery to a warehouse in a free-trade zone. | A dated delivery to a named, operating facility. Confirm in writing that the ship-to address is the final destination and not a staging stop. |
| S9. A freight forwarder is listed as the final destination. Supp. No. 3 to Part 732, flag 9 | The ship-to on the purchase order is a forwarder’s warehouse. | Amend the purchase order to name the end user as ultimate consignee and the installation site as ship-to. A forwarder is an intermediate consignee. |
| S10. An abnormal shipping route. Supp. No. 3 to Part 732, flag 10 | Routing through a third country that has nothing to do with the buyer, the seller or the site. | Map the route against the parties. Ask the forwarder to explain any leg that does not fit, and record the answer. |
| S11. Packaging inconsistent with the shipment or destination. Supp. No. 3 to Part 732, flag 11 | A request to repack, remove labels, or split serial numbers across shipments. | Ship in original packaging. Record the serial numbers on each shipment’s manifest so they can be reconciled at the site. |
| S12. Evasive about domestic use, export or reexport. Supp. No. 3 to Part 732, flag 12 | “Not sure yet whether it stays here.” | Ask in writing. The end-use statement should name the installation country and state whether the items will be reexported or transferred, and the buyer should undertake not to do so without authorisation and notice. |
| S21. The ultimate owner or user is uncertain. For example, a distributor without an operation of its own orders items that are normally customised for, or installed at, a known end user. The supplement names advanced computing items as a case where the end user would typically be known. Supp. No. 3 to Part 732, flag 21 | A distributor orders systems “for stock” or for a customer it will not name. | Require the end user’s name and installation address on the purchase order, the end user’s own signed statement, and a countersignature from the purchaser. Where the end user is unknown, the flag stays open. |
| S22. Uncertainty about the license history of an item that needed one. Includes requests to service, install, upgrade or maintain the item. Supp. No. 3 to Part 732, flag 22 | A request to service or expand a cluster that, given its location and end user, should have needed a license you have no record of. | Check the license record before touching the systems. Refer to counsel before proceeding. |
| S24. The new customer’s leadership overlaps with an Entity List party. Senior management or technical leadership in common, especially where you supplied the listed party before it was listed. Supp. No. 3 to Part 732, flag 24 | A director or lead engineer who previously ran the same function at a listed company. | Screen named officers and technical leads, not only the company. Check prior roles on public profiles and registries and record what was found. |
| S25. The new customer wants an item designed for a former customer now on the Entity List. Supp. No. 3 to Part 732, flag 25 | A request for the configuration or service you built for a company that has since been listed. | Compare the request against the earlier design. The supplement says this flag must be resolved before proceeding. |
| S28. Providing IaaS or other computing services to train an AI model with model weights captured by ECCN 4E091 for an entity headquartered, or with an ultimate parent headquartered, outside the destinations listed in paragraph (a) of Supplement No. 5 to Part 740. Supp. No. 3 to Part 732, flag 28 | A cloud customer headquartered outside those destinations asks for capacity to train a frontier-scale model. | The supplement says the provider should ask whether the customer intends to export the model and, if so, apply for a license where required or inform the customer of its obligation. For a hardware seller, the IaaS statement in G11 is where this is asked. |
| S29. Knowledge that a foreign party has owners on the Entity List or the Military End-User List. The seller then has an affirmative duty to determine the percentage of ownership and, if it cannot, to obtain a license where one is required. Supp. No. 3 to Part 732, flag 29 | A shareholder register shows a listed company at 30 percent, or an owner whose percentage cannot be found. | Establish each percentage from registry documents and record the document behind it. If a percentage cannot be determined, say so in the file and refer to counsel. As of 2 November 2026 the eCFR shows this paragraph stayed until 9 November 2026 (90 FR 50857); check the Federal Register for its status on your transaction date. |
Flags left out of the table
Supplement No. 3 also lists flags 13 and 14 (parts and components for 9x515 and “600 series” items), 15 to 20 and 26 and 27 (advanced-node integrated-circuit production and semiconductor manufacturing equipment), and 23 (servicing an item altered after export for a more advanced end use). They apply to other items or other sellers. If you also sell manufacturing equipment or service installed systems, read them in the supplement.
The seven diligence actions in the May 2025 guidance
Alongside the red flags, the guidance lists due-diligence actions for new customers and for IaaS providers, “especially those located in destinations outside of Country Group A:1”. As of 4 November 2026 the document on bis.gov still reads as issued on 13 May 2025. Condensed:
- Date of incorporation. Evaluate it; incorporation after October 2022 is the example given.
- Ownership structure. Determine whether any party is headquartered, or has an ultimate parent headquartered, in Country Group D:5 or Macau.
- End user and end use. Whether the customer’s line of business is consistent with the items ordered.
- Notice to the customer. Before doing business, tell domestic and foreign customers that the items are subject to the EAR and would require a license if exported, reexported or transferred to or within Country Groups D:1, D:4 or D:5 (excluding destinations also in A:5 or A:6).
- An end-user certification. Before doing business, obtain one with detailed information on all parties and the intended end use, including a certification that the items will not go to military-intelligence or weapons-of-mass-destruction end uses or end users. The guidance says this includes cases where a party such as an IaaS provider will train an AI model for or on behalf of parties headquartered in D:5 or Macau, where that may support such end uses (§ 744.22 and §§ 744.2 to 744.5). A template is on the end-use statement page.
- A written data-center attestation. That the end user is authorised to operate at the location and that the site has the infrastructure to run the servers. The guidance calls on-site visits, or independent third-party certified auditors, a best practice for confirming the attestation.
- Sites above 10 megawatts. Data centers at or above that threshold “merit additional scrutiny”, because they could give a large quantity of advanced computing ICs to model training for parties headquartered in countries of concern.
The same document lists the data elements BIS suggests an end-user certification should carry. They are the basis of the fields in the template.
What a finished review looks like
A red-flag review is only useful if someone can read it later. For each flag, the file should hold four things: the indicator tested, whether it was raised, what was asked and answered (with the document and its date), and the outcome: not raised, resolved, resolved subject to a condition, or open. Flags that were tested and not raised belong in the record too; “no” is a finding. That record is what a reviewer, counsel or an enforcement officer will read, and it is the difference between having checked and being able to prove it.