On 26 August 2020 the United States Department of Commerce's Bureau of Industry and Security (BIS) expanded the Entity List, restricting certain transactions with 60 entities under a total of 61 entries to the Entity List. These 60 entities, which are listed below, include parties from the People's Republic of China (PRC), France, Hong Kong, Indonesia, Malaysia, Oman, Pakistan, Russia, Switzerland, and the United Arab Emirates. BIS also revised five existing entries on the Entity List. BIS included no grace period in its notice, and the designations and restrictions explained below took effect immediately. Accordingly, these restrictions have an immediate impact on U.S. and non-U.S. companies, universities, and other organizations.
Why did BIS take this action?
BIS designated the parties after determining that the parties acted "contrary to the national security or foreign policy interests of the United States." The reasons for inclusion on the Entity List range from violations of the Iranian Transactions and Sanctions Regulations, contributions to unsafeguarded nuclear activities, and involvement in Russian biological weapons programs, among other factors. In particular, BIS designated a number of Chinese entities for their involvement in the PRC's land reclamation and artificial island building efforts in the South China Sea. These designations include the China Communications Construction Company, a state-owned entity affiliated with China's Belt and Road Initiative.
What are the legal requirements?
BIS has imposed export license requirements on each listed person. These license requirements are independent of, and in addition to, license requirements otherwise imposed in the Export Administration Regulations (EAR) with regard to controlled products. As part of these designations, companies must obtain a license from the U.S. Department of Commerce to export, reexport, or transfer (in country) any item subject to the EAR to these Entity List entities, and no license exceptions are available for such transactions. Moreover, BIS imposed a license review policy of "presumption of denial" for 51 of the 60 of the newly-designated entities. This means that BIS is very unlikely to grant, without a compelling reason, any licenses requested for export, reexport, or transfer (in country) of any items subject to the EAR to these 51 newly-listed entities. For one entity (HAT Logistics SDN BHD), the license review policy imposed by BIS is a case-by-case review, and for the remaining eight entities, BIS imposed a license review policy under the standards set forth in 15 C.F.R. § 744.2(d), related to certain nuclear end-uses.
List of designated entities
- 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).
- 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.
United Arab Emirates
- Ali Al-Dhaheri.
- Raneen Wireless Development Systems Company (RWDS, LLC).
- Sci Box Scientific and Laboratory Equipment Trading, LLC.
- Sky Gulf Electronic Devices Industries.
Authored by Ajay Kuntamukkala, Adam Berry, and Zachary Alvarez.