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:

China

  • 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.

Japan

  • Corad Technology Japan K.K.

Pakistan

  • Al-Qertas;
  • 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.

Singapore

  • 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.

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Rick Shimon

During his 22 years as a criminal investigator with the U.S. Department of Commerce, Office of Export Enforcement (OEE), Rick led or supervised dozens of national security-focused investigations involving aircraft, electronics, satellites and other commodities controlled by the Export Control Reform Act of…

During his 22 years as a criminal investigator with the U.S. Department of Commerce, Office of Export Enforcement (OEE), Rick led or supervised dozens of national security-focused investigations involving aircraft, electronics, satellites and other commodities controlled by the Export Control Reform Act of 2018 and International Emergency Economic Powers Act. As a recognized subject matter expert, Rick was regularly asked to conduct training across the nation for agents, lawyers and compliance professionals regarding the complex regulations that govern the export of U.S. goods and technology, as well as the necessary elements of an effective compliance program.

For eight years, Rick was the Special Agent in Charge of the Washington Field Office and supervised a dozen criminal investigators and administrative staff. The Washington office handled not only domestic investigations but also foreign investigations involving entities in China, Russia, Ukraine and Iran, among others. Rick’s investigative directives focused on the proliferation of weapons of mass destruction, illicit procurement by terror-supporting countries, and the unauthorized use of military and government technology.

In his role as OEE Assistant Director, Rick supervised a headquarters staff of 17 supervisory special agents, special agents and intelligence analysts in the Operations Division. This group was responsible for reviewing national security intelligence, technical exploitation and law enforcement support to nine OEE field offices. Rick also supervised agents stationed overseas as export attaches and worked closely with the National Security Council and other interagency partners on proliferation issues and interdiction actions.

As part of Husch Blackwell’s White Collar, Internal Investigations & Compliance team, he investigates civil and criminal matters and provides compliance support to clients.

Photo of Tony Busch Tony Busch

Tony advises clients on export control matters pertaining to the Export Administration Regulations (EAR) and the International Traffic in Arms Regulations (ITAR). Tony also provides the export control profile required for “critical technologies” analysis in Committee on Foreign Investment in the United States…

Tony advises clients on export control matters pertaining to the Export Administration Regulations (EAR) and the International Traffic in Arms Regulations (ITAR). Tony also provides the export control profile required for “critical technologies” analysis in Committee on Foreign Investment in the United States (CFIUS) matters. Additionally, Tony counsels clients seeking to comply with Census Bureau Foreign Trade Regulations (FTR), Bureau of Industry & Security (BIS) Anti-boycott Regulations, and Office of Foreign Assets Control (OFAC) sanctions.