BIS Entity List

Export Compliance Daily is providing readers with the top stories for Aug. 31-Sept. 4 in case you missed them. You can find any article by searching on the title or by clicking on the hyperlinked reference number.

The Trump administration is considering placing export controls on China’s top chipmaker, the latest move in a campaign of restrictions aimed at Chinese technology companies. The controls would target the Semiconductor Manufacturing International Corporation by placing it on the Commerce Department’s Entity List, Reuters said in a Sept. 4 report. The effort is being spearheaded by the Defense Department, the report said, which petitioned Commerce’s End User Committee last week to add SMIC to the Entity List.

The Trump administration “is committed to bold, decisive action” against China that protects U.S. national and economic security interests, Commerce Secretary Wilbur Ross said during a virtual Bureau of Industry and Security conference on Sept. 2. He cited as evidence BIS' s additional export restrictions on Huawei (see 2008170029) and President Donald Trump’s Aug. 6 executive order banning U.S. transactions with the parent companies of TikTok and WeChat. “We each must remain alert to China’s malign behavior and that of other foreign entities that seek our sensitive technologies to damage our economic and national security,” Ross said. “China is a capable, effective and adaptable adversary with unconstrained resources, who regularly uses our American freedom and rules-based norms to advance its goal of dominating global markets.”

Export Compliance Daily is providing readers with some of the top stories for Aug. 24-28 in case you missed them. You can find any article by searching on the title or by clicking on the hyperlinked reference number.

Export compliance is never going to be perfect, panelists said, but with constant education, companies can ensure that their mistakes only warrant warning letters, not fines. The American Association of Exporters and Importers held a panel Sept. 1 about how export compliance plays out in the real world.

While industry welcomed the U.S. June decision to allow companies to more easily participate in standards-setting bodies in which Huawei is a member (see 2006160035), the administration should expand the rule to exempt all businesses on the Entity List, companies and trade groups said in comments last month. If the Bureau of Industry and Security does not expand the rule, companies will still be hampered at international standards bodies and could continue to cede technology leadership to China, they said.

The Defense Department on Aug. 28 released another list of Chinese companies with ties to the country’s military, potentially requiring increased due diligence measures for U.S. companies doing business with them. The list includes companies on the Commerce Department’s Entity List and others not yet subject to U.S. restrictions. The entities may also fall under the scope of an April Commerce rule that increased licensing requirements for exports to military end-users or for end-uses in China (see 2004270027). The Defense Department issued a similar list in June (see 2006250024).

A researcher at a California university is being investigated for trying to transfer sensitive U.S. software or technical data to a Chinese company on the U.S. Entity List, the Justice Department said Aug. 28. Guan Lei, a Chinese national and researcher at the University of California, Los Angeles, was arrested for allegedly destroying evidence on a hard drive that may have implicated him in the illegal software transfer, the agency said. The Justice Department said it is investigating whether Guan, of Alhambra, California, tried to send the software to China’s National University of Defense Technology.

China’s Foreign Ministry termed “unjustified” the U.S. decision to add 24 Chinese companies to the Commerce Department’s Entity List (see 2008260038), saying it interferes in Chinese internal affairs. “We urge the U.S. to correct its mistake and immediately stop meddling in China's internal affairs,” a ministry spokesperson said during an Aug 27 news conference. “China will take firm measures to safeguard Chinese businesses and citizens' lawful interests.”

The Bureau of Industry and Security added 60 entities to the Entity List, including 24 entities for helping the Chinese military build artificial islands in the South China Sea. BIS also designated entities in France, Hong Kong, Indonesia, Malaysia, Oman, Pakistan, Russia, Switzerland and the United Arab Emirates for a range of activities, including illegal exports to Iran, submitting false information to BIS, contributing to Russian biological weapons programs and more. BIS also revised five existing entries under Canada, Germany, Hong Kong, Iran and the UAE.