The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) recently issued a final rule amending the U.S. Export Administration Regulations (EAR) to add twenty-seven (27) companies and individuals to the BIS Entity List effective November 26, 2021. These companies and researchers are alleged to have ties to China’s military quantum computing efforts as well as Pakistani nuclear and missile proliferation. The new companies added include:
- Eight (8) technology companies from the People’s Republic of China (PRC) that perform quantum computing work for the PRC Military that supports counter-stealth and counter-submarine applications as well as the ability to break encryption or develop unbreakable codes.
- Sixteen (16) PRC and Pakistani-based companies and individuals named for their involvement with Pakistan’s unsafeguarded nuclear program and ballistic missile development.
- Three (3) affiliates of Corad Technology Limited, a company blacklisted in 2019, added as a result of its diversion of U.S.-origin technology to Iran’s military and space programs, North Korean front companies, and the PRC government and defense industry.
The Entity List designations for these newly designated companies impose a licensing requirement for any exports, reexports or in-country transfers of all items subject to the U.S. Export Administration Regulations (EAR) to these entities. BIS will impose a presumption of denial when reviewing any export license applications involving these entities.
In addition, BIS added the Moscow Institute of Physics and Technology to the Military End Users (MEU) list for its production of military goods for military customers. The MEU list informs the public that an Export license is required for exports, re-exports or in-country transfers of items identified in Supplement No.2 of Part 744 of the EAR to companies listed on the MEU.
The Final Rule did feature a very limited savings clause which will permit certain shipments to these newly designated entities to continue if those shipments were: (1) eligible for a License Exception or no license required (NLR) treatment prior to these designations, and (2) en route aboard a carrier to a port of export, reexport or transfer (in-country) on November 26, 2021 pursuant to an actual order.
The companies and individuals added to the BIS Entity List as a result of this final rule are as follows:
- Corad Technology (Shenzhen) Ltd.;
- Hangzhou Zhongke Microelectronics Co., Ltd.;
- Hefei National Laboratory for Physical Sciences at Microscale;
- Hunan Goke Microelectronics;
- New H3C Semiconductor Technologies Co., Ltd.;
- Peaktek Company Ltd.;
- Poly Asia Pacific Ltd., (PAPL);
- Quantum CTek Co., Ltd.;
- Shaanxi Zhi En Electromechanical Technology Co., Ltd.;
- Shanghai QuantumCTek Co., Ltd.;
- Xi’an Aerospace Huaxun Technology; and
- Yunchip Microelectronics.
- Corad Technology Japan K.K.
- Asay Trade & Supplies;
- Broad Engineering (Pakistan);
- Global Tech Engineers;
- Jade Machinery Pvt. Ltd.;
- Jiuding Refrigeration & Air-conditioning Equipment Co (Pvt) Ltd.;
- K-SOFT Enterprises;
- Muhammad Ashraf;
- Muhammad Farrukh;
- Prime Tech;
- Q&N Traders;
- Seljuk Traders (SMC-Private) Limited; and
- H.L. Company.
- Corad Technology Pte Ltd.
Husch Blackwell continues to monitor these lists and will provide updates as they come. If you or your company have questions regarding this recent ruling, please contact Husch Blackwell’s Export Controls and Economic Sanctions team.