On October 7, 2019, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) announced that it would add twenty eight (28) Chinese entities consisting of companies, government offices, and security bureaus to the Entity List for engaging in or enabling activities contrary to U.S. foreign policy interests. Similar to the actions taken against China’s Huawei in May 2019, the End-User Review Committee (ERC) has determined it necessary to impose sanctions on the 28 Chinese based entities, which includes twenty (20) government agencies and eight (8) artificial intelligence companies, due to China’s treatment of the people of the Xinjiang Uighur Autonomous Region (XUAR). The full list of entities is available here.
The Entity List designation will restrict the listed organizations from buying any U.S. products and importing U.S. technology. Additionally, U.S. Commerce Secretary Wilbur Ross stated that any U.S. suppliers that seek to continue business with the listed companies would need to obtain a specific license from BIS. Furthermore, BIS has set forth licensing policies that vary from entity to entity and differ according to the relevant Export Control Classification Number (ECCN) of the exported item.
In its press release, the Commerce Department stated that, “these entities have been implicated in human rights violations and abuses in the implementation of China’s campaign of repression, mass arbitrary detention, and high technology surveillance against Uighurs, Kazakhs, and other members of Muslim minority groups in the XUAR.” This announcement comes just days before the U.S. and China delegations are scheduled to meet in Washington to continue talks related to the ongoing tariffs.
Husch Blackwell’s Export Controls & Economic Sanctions Team is monitoring this situation closely. Please contact Cortney Morgan or Grant Leach should you have any questions concerning the recent additions to the BIS Entity List or associated implications for U.S. and non-U.S. businesses.