More Entity List Parties Turning to Front Companies to Evade Sanctions, Commerce Official Says
An increasing number of foreign entities are using front companies to evade restrictions placed on them after being added to the Commerce Department’s Entity List, said Kevin Kurland, director of Commerce’s Office of Enforcement Analysis.
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Kurland, speaking during Commerce's Bureau of Industry and Security annual export controls conference July 10, said Commerce is seeing more U.S. companies fall susceptible to this strategy employed by foreign “adversaries.” “It’s a very simple tactic that our adversaries are using more and more to actually get around some of our designations,” Kurland said.
After companies are added to the Entity List, immediately restricting their purchases from U.S. businesses, Kurland said, the foreign companies create front companies and return to the same U.S. providers. Kurland said companies do this “within two to three weeks” after being placed on the list. “We see that every time we put parties on the Entity List,” he said. "The same U.S. companies that were supplying them receive similar inquiries from a new company.”
Kurland said many of the front companies appear to be based in Pakistan and China. “Take a look at your orders as they’re coming in and where you see those types of anomalies, pick up the phone, call” Commerce, Kurland said.