diff --git a/xonsh/built_ins.py b/xonsh/built_ins.py
index ba7fdf164..eaa2603e7 100644
--- a/xonsh/built_ins.py
+++ b/xonsh/built_ins.py
@@ -635,7 +635,7 @@ def run_subproc(cmds, captured=True):
             output = output.replace('\r\n', '\n')
         else:
             hist.last_cmd_out = output
-    if hist.last_cmd_rtn > 0 and ENV.get('RAISE_SUBPROC_ERROR'):
+    if not prev_is_proxy and hist.last_cmd_rtn > 0 and ENV.get('RAISE_SUBPROC_ERROR'):
         raise CalledProcessError(hist.last_cmd_rtn, aliased_cmd, output=output)
     if captured:
         return output