{"id":415,"date":"2020-09-24T16:50:29","date_gmt":"2020-09-24T16:50:29","guid":{"rendered":"http:\/\/exportcompliancesolutions.com\/blog\/?p=415"},"modified":"2020-09-24T16:50:29","modified_gmt":"2020-09-24T16:50:29","slug":"tough-china-entity-list-expands-communist-chinese-military-companies-identified","status":"publish","type":"post","link":"https:\/\/exportcompliancesolutions.com\/blog\/2020\/09\/24\/tough-china-entity-list-expands-communist-chinese-military-companies-identified\/","title":{"rendered":"Tough on China: The Entity List Expands, More Communist Chinese Military Companies Identified"},"content":{"rendered":"

Huawei Restrictions Expanded<\/strong><\/p>\n

On August 20, 2020, the Department of Commerce, Bureau of Industry and Security (BIS) published a rule (85 FR 51596<\/a>) which added thirty-eight non-U.S. Huawei affiliates to the Entity List, removed a temporary general license for Huawei, and amended the Direct Product Rule.<\/p>\n

The listing of thirty-eight Huawei affiliates is in addition to 114 listed in 2019 and includes companies in Europe, Asia, Africa, South America, and North America.<\/p>\n

A Temporary General License, which authorized activities \u201cincluding those necessary for the continued operations of existing networks and equipment as well as the support of existing mobile services, including cybersecurity research critical to maintaining the integrity and reliability of existing and fully operational networks and equipment,\u201d was allowed to expire on August 13, 2020.\u00a0 A new footnote was added to the Entity List<\/a> to permit cybersecurity research and vulnerability disclosure involving Huawei and its non-U.S. affiliates.<\/p>\n

General Prohibition Three<\/a> also known as the Foreign Produced Direct Product Rule, was amended to control certain foreign-produced items that are a direct product of U.S. technology when there is knowledge the items will be used to support a member of the Entity List (with a \u201cfootnote 1\u201d designation) or if such an entity is a party to the transaction.\u00a0 This is a follow-on to an interim final rule<\/a> published in May 2020, with expanded criteria for controlling transactions.\u00a0 For additional detail, see the revised \u00a7736.2(b)(3)<\/a> of the Export Administration Regulations (EAR).<\/p>\n

BIS also issued a press release<\/a> with additional background on the additional thirty-eight Huawei affiliates and the Department of State issued a statement of support<\/a>.<\/p>\n

An additional rule (85 FR 51335<\/a>) was also published by BIS on August 20 revising EAR \u00a7744.11(a) \u201cto specify that supplemental license requirements for entities included on the Entity List apply regardless of the role that the listed entity has in the transaction (i.e., purchaser, intermediate consignee, ultimate consignee or end-user).\u201d<\/p>\n

BIS Adds Sixty to Entity List<\/strong><\/p>\n

On August 27, 2020 (85 FR 52898<\/a>), BIS added 60 entities to the Entity List and revised five existing entries for various reasons including proliferation and diversion concerns as well as involvement in South China Sea territorial disputes.\u00a0 The new and revised entries are listed under People’s Republic of China (China), France, Hong Kong, Indonesia, Malaysia, Oman, Pakistan, Russia, Switzerland, the United Arab Emirates (U.A.E.), Canada, Germany, and Iran.<\/p>\n

Twenty-four of these entries were based on activities which have enabled China to construct and militarize disputed outposts in the South China Sea.\u00a0 BIS also issued a press release<\/a> providing additional background on the topic of disputed and artificial islands.<\/p>\n

Additional List of Communist Chinese Military Companies Released<\/strong><\/p>\n

August 28, 2020, the Department of Defense released the following list<\/a> of \u201cCommunist Chinese military companies\u201d:<\/p>\n