BIS ENTITY LIST ADDITIONS
On December 22, 2020, eleven Chinese entities and their aliases were added to the Department of Commerce, Bureau of Industry and Security's Entity List which includes persons for whom there is reasonable cause to believe that they have/are involved in activities that are contrary to the national security or foreign policy interests of the United States. The Export Administration Regulations impose additional license requirements on and limits the availability of most license exceptions for exports, reexports and transfers to listed entities.
Department of Commerce, Bureau of Industry and Security
15 CFR Part 744
[Docket No. 201215–0347]
RIN 0694–AI37
Addition of Entities to the Entity List, Revision of Entry on the Entity List, and Removal of Entities From the Entity List
AGENCY: Bureau of Industry and Security, Commerce.
ACTION: Final rule.
Source: https://www.govinfo.gov/content/pkg/FR-2020-12-22/pdf/2020-28031.pdf
Summary: In this rule, the Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) by adding seventy-seven entities, under a total of seventy-eight entries, to the Entity List. These seventy-seven entities have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States. These entities will be listed on the Entity List under the destinations of the People’s Republic of China (China), Bulgaria, France, Germany, Hong Kong, Italy, Malta, Pakistan, Russia, and the United Arab Emirates (U.A.E.). This rule also revises one existing entry on the Entity list under the destination of China and one under the destination of Pakistan. Finally, this rule removes a total of four entities under the destinations of Israel and the U.A.E. The removals are made in connection with requests for removal that BIS received pursuant to the EAR and a review of information provided in those requests.
| ERC Entity List Decisions | Additions to the Entity List |
Under § 744.11(b) (Criteria for revising the Entity List) of the EAR, entities for which there is reasonable cause to believe, based on specific and articulable facts, that the entities have been involved, are involved, or pose a significant risk of being or becoming involved in activities that are contrary to the national security or foreign policy interests of the United States, and those acting on behalf of such entities, may be added to the Entity List. Paragraphs (b)(1) through (5) of § 744.11 provide an illustrative list of activities that could be considered contrary to the national security or foreign policy interests of the United States.
This rule implements the decision of the ERC to add seventy-seven entities under a total of seventy-eight entries, to the Entity List; one of these entities is being added under two entries. These seventy-seven entities will be listed on the Entity List under the following destinations, as applicable, China, Bulgaria, France, Germany, Hong Kong, Italy, Malta, Pakistan, Russia, and the U.A.E. The ERC made the decision to add each of the seventy-seven entities described below under the standard set forth in § 744.11(b) of the EAR.
The ERC determined that the seventy-seven subject entities are engaging in or enabling activities contrary to U.S. national security and foreign policy interests, including:
Semiconductor Manufacturing International Corporation Incorporated (SMIC)
is added to the Entity List as a result of China’s military-civil fusion (MCF) doctrine and evidence of activities between SMIC and entities of concern in the Chinese military industrial complex. The Entity List designation limits SMIC’s ability to acquire certain U.S. technology by requiring exporters, reexporters, and incountry transferors of such technology to apply for a license to sell to the company. Items uniquely required to produce semiconductors at advanced technology nodes 10 nanometers or below will be subject to a presumption of denial to prevent such key enabling technology from supporting China’s military modernization efforts.
This rule adds SMIC and the following ten entities related to SMIC:
Semiconductor Manufacturing International (Beijing) Corporation
Semiconductor Manufacturing International (Tianjin) Corporation
Semiconductor Manufacturing International (Shenzhen) Corporation
SMIC Semiconductor Manufacturing (Shanghai) Co., Ltd.
SMIC Holdings Limited
Semiconductor Manufacturing South China Corporation
SMIC Northern Integrated Circuit Manufacturing (Beijing) Co., Ltd.
SMIC Hong Kong International Company Limited
SJ Semiconductor
Ningbo Semiconductor International Corporation (NSI)
The ERC determined to add
ROFS Microsystems
Tianjin Micro Nano Manufacturing
Tianjin University
and the individuals Chong Zhou; Huisui Zhang; Jinping Chen; Wei Pang; and Zhao Gang
because there is reasonable cause to believe that these individuals, in coordination with Tianjin University through its College of Precision Instruments and Optoelectronic Engineering Tianjin Micro Nano Manufacturing, and ROFS Microsystems, systematically coordinated and committed more than a dozen instances of theft of trade secrets from U.S. corporations. On April 1, 2015, those five individuals were indicted on thirty counts including conspiracy to commit economic espionage, conspiracy to commit theft of trade secrets, economic espionage, aiding and abetting and theft of trade secrets. The indictment stated that individuals associated with ROFS and others developed a scheme by which the sources and origins of the trade secrets stolen from Avago and Skyworks would be disguised and the technology contained within those trade secrets be used by entities in the PRC to develop products for civilian and military use. Pursuant to § 744.11(b) of the EAR, the ERC determined that the conduct of these entities raise sufficient concern that necessitates prior review of exports, re-exports or transfers (in-country) of items subject to the EAR involving these persons and companies.
The ERC determined to add the entities
Zigma Aviation Services
MRS GmbH
France Tech Services
Maintenance Services International GmbH
Satori Corporation
to the Entity List on the basis of actions and activities they have engaged in that are contrary to the national security and foreign policy interests of the United States. Specifically, these companies provided aircraft parts, without the necessary licenses, to one entity—Mahan Air—that is listed as a Specially Designated National per the U.S. Department of Treasury’s Office of Foreign Assets Control.
OOO Sovtest Comp
Cosmos Complect
Multi Technology Integration Group EOOD (MTIG)
and four associated individuals Dimitar Milanov Dimitrov; Ilias Kharesovich Sabirov; Mariana Marinova Gargova; and Milan Dimitrov
to the Entity List on the basis of their attempts to procure and re-export U.S.-origin items, for activities contrary to the national security and foreign policy interests of the United States. The ERC determined that there is reasonable cause to believe, based on specific and articulable facts, that OOO Sovtest Comp and Cosmos Complect used MTIG as a front company to acquire both radiation-hardened parts and other sensitive electronic components and reexport those U.S.-origin components to Russia without required licenses. The ERC determined these entities are engaging in conduct that poses a risk of violating the EAR such that, pursuant to § 744.11(b)(5) of the EAR prior review of exports and re-exports involving these parties, and the possible imposition of license conditions or license denial, enhances BIS’s ability to prevent violations of the EAR.
ERAI recommends US-based organizations consult an export control/regulations professional prior to shipping product to any of the above-named entities.