The Bureau of Industry and Security has issued a final rule that, effective Dec. 16, adds 36 entities in China and Japan to the Entity List. Among the additions is Yangtze Memory Technologies Co., China’s top manufacturer of microchips. BIS chief Alan Estevez said this rule will restrict China’s ability “to leverage artificial intelligence, advanced computing, and other powerful, commercially available technologies for military modernization and human rights abuses.”
Most of the new entities are being added for acquiring and attempting to acquire U.S.-origin items in support of China’s military modernization. Many are major artificial intelligence chip research and development, manufacturing, and sales entities that are, or have close ties to, government organizations that support the Chinese military and the defense industry. Others have demonstrable ties to activities of concern, including hypersonic weapons development, design and modeling of vehicles in hypersonic flight, designing and producing ballistic missile radomes, using proprietary software to model weapons design and damage, and otherwise supporting military-civil fusion efforts tied to the People’s Liberation Army Air Force and Navy.
Other entities are being added because they (1) represent a risk of diversion to a party on the Entity List, including Huawei Technologies Co. Ltd. and Hangzhou Hikvision Digital Technology Co. Ltd., (2) facilitated the illegal export of U.S.-origin electronics to Iran for use in the production of military unmanned aerial vehicles and missile systems used in attacks throughout the Middle East, or (3) have been implicated in human rights violations and abuses in China’s Xinjiang Uyghur Autonomous Region.
For all these entities BIS is imposing a license requirement for exports of all items subject to the Export Administration Regulations and a license review policy of presumption of denial. Some entities will also be subject to the foreign direct product rule, which BIS said “will severely restrict their ability to obtain U.S.-origin technologies and other items produced in foreign countries if they are produced using substantial U.S. technology, tools, or other inputs or components.”
Shipments of items removed from eligibility for a license exception or for export, reexport, or transfer (in-country) without a license (NLR) as a result of this rule that were en route aboard a carrier to a port of export, reexport, or transfer on Dec. 16 pursuant to actual orders for export, reexport, or transfer to or within a foreign destination may proceed to that destination under the previous eligibility.
This rule also revises three Chinese entities on the Entity List and removes from the Unverified List one entity being added to the Entity List (because BIS’ policy is to not list an entity on more than one of these lists at the same time.)
For more information on restrictions on exports to persons on the Entity List or other lists, please contact Kristine Pirnia at (202) 730-4964 or via email.
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