BIS Adds 60 Entities to Entity List, Including 24 Involved in Chinese Military Project
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.
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BIS will impose a license requirement for exports to the companies for all items subject to the Export Administration Regulations, with no license exceptions. The agency will impose a presumption of denial license review policy for 51 of the entities and a case-by-case review policy for Malaysia-based HAT Logistics SDN BHD. For the remaining eight entries -- which include five companies listed under Pakistan, two companies under China and one company under the UAE -- BIS will impose its license review policy outlined in the EAR for applications relating to “certain nuclear end uses.” The changes are effective Aug. 27.
Nearly half of the newly added entries are companies that played a “significant role” in helping the Chinese government “reclaim and militarize” disputed outposts in the South China Sea, Commerce Department Secretary Wilbur Ross said. In conjunction with the Commerce restrictions, the State Department announced visa restrictions on Chinese people and executives of companies involved in the military project. “The United States will act until we see Beijing discontinue its coercive behavior in the South China Sea,” Secretary of State Mike Pompeo said.
The listings related to the Chinese military reclamation project will likely impact a “relatively small” amount of exports, a senior Commerce official told reporters on an Aug. 26 call. Over the last five years, U.S. exporters have only shipped a combined $5 million worth of goods subject to the EAR to the 24 Chinese companies, the official said, adding that most are “lower level items” that are not multilaterally controlled and can be sourced from other foreign suppliers. But the official expressed hope that the restrictions might dissuade companies from doing any type of business with the Chinese entities, including activities not subject to export controls.
“The exports we're aware of are all items subject to the EAR,” the official said. “But we also know from experience that even when there are transactions that don't involve items subject to the EAR, typically many companies tend to stay away from doing business with parties on the Entity List, either just for reputational purposes or to further ensure that they don't run afoul of the [EAR].”
The official added that the restrictions are unrelated to trade negotiations. “We really take these actions separate from any negotiations on the trade pact,” the official said. A senior State Department official, also speaking on the call, said “we obviously have an interest” in the progress of the phase one deal but said the restrictions are necessary.
“Our relationship with China obviously has an important trade element, but it also has a lot of other elements, including the sorts of very serious concerns that we have with the way that China is acting internationally,” the official said. “We try to have as constructive a relationship as possible in the trade space and otherwise, and we wish that Beijing would improve its conduct in the South China Sea and in many other areas. That would make the relations all the more constructive.”
The official urged companies to review whether the newly restricted companies are involved in their supply chains. “We encourage all sorts of parties and institutions and governments around the world to assess risk and reconsider business deals with the sort of predatory Chinese state-owned enterprises that we've identified here,” the official said.
All exports and reexports that now require a license as a result of the Entity List additions that were aboard a carrier to a port as of Aug. 27 may proceed to their destinations under the previous eligibility, BIS said.
The agency also removed an alias under five existing entries on the Entity List related to Saeed Talebi and corrected two existing entries. The corrections clarified that the entries for Huawei OpenLab Munich and Huawei Cloud Hong Kong are subject to a presumption of denial license review policy.
The 60 additions to the Entity List, added under 61 entries, are:
- Beijing Huanjia Telecommunication Co., Ltd.
- Changzhou Guoguang Data Communications Co., Ltd.
- China Communications Construction Company Dredging Group Co. Ltd.
- China Communications Construction Company Guangzhou Waterway Bureau
- China Communications Construction Company Second Navigation Engineering Bureau
- China Communications Construction Company Shanghai Waterway Bureau
- China Communications Construction Company Tianjin Waterway Bureau
- China Electronics Technology Group Corporation, 7th Research Institute (CETC-7)
- China Electronics Technology Group Corporation, 30th Research Institute (CETC-30)
- China Shipbuilding Group 722nd Research Institute
- Chongxin Bada Technology Development Co., Ltd.
- Guangzhou Guangyou Communications Equipment Co., Ltd.
- Guangzhou Haige Communication Group Co., Ltd.
- Guangzhou Hongyu Technology Co., Ltd. (a subordinate institute of CETC-7)
- Guangzhou Tongguang Communication Technology Co., Ltd. (a subordinate institute of CETC-7)
- Guilin Changhai Development Co., Ltd.
- Hubei Guangxing Communications Technology Co., Ltd.
- MTech Industrial Limited
- Peaceful Vision (Lianyungang) Electronic Co., Ltd.
- Shanghai Fengjin Electronic Technology Co., Ltd.
- Shaanxi Changling Electronic Technology Co., Ltd.
- Shanghai Cable Offshore Engineering Co., Ltd.
- Taihe Electric (Hong Kong) Limited
- Telixin Electronics Technology Co., Ltd.
- Tianjin 764 Avionics Technology Co., Ltd.
- Tianjin 764 Communication and Navigation Technology Co., Ltd.
- Tianjin Broadcasting Equipment Co., Ltd.
- Wuhan Mailite Communication Co., Ltd.
- Xi’an Overland Science and Technology Co., Ltd.
- Kish Motor Jahan Technic.
- Peaceful Vision Co., Ltd.
- Taihe Electric (Hong Kong) Limited
- PT. Kuantum Tekno Kreatif
- Donny Lee
- HAT Logistics SDN BHD
- John Tan
- Maxwell Prima-Ventures SDN BHD
- Mohd Zamri bin Mazleh
- Nur Rochman Achmad
- PNPI Group SDN BHD
- Quantum Aviation and Supply SDN BHD
- Sam Johnson
- Sky Marine and Oil SDN BHD
- Zulkefli bin Yusuf
- Hejaif Alhadeetha Trading Company
- Blue Chip International
- KK International Traders (KKIT)
- QTech
- Sayyed Brothers Engineering Co. (SBEC)
- Sci-Tech Global
- 33rd Scientific Research and Testing Institute
- 48th Central Scientific Research Institute, Kirov
- 48th Central Scientific Research Institute, Sergiev Posad
- 48th Central Scientific Research Institute, Yekaterinburg
- State Scientific Research Institute of Organic Chemistry and Technology
- Phillip Zurcher
- Travcon Aviation Group
- Ali Al-Dhaheri
- Raneen Wireless Development Systems Company (RWDS, LLC)
- Sci Box Scientific and Laboratory Equipment Trading, LLC
- Sky Gulf Electronic Devices Industries.