Yesterday, the Bureau of Industry and Security (BIS) of the U.S. Department of Commerce added 14 companies based in China and 20 companies located elsewhere to the U.S. Entity List. According to BIS, the Chinese companies are involved in China’s “campaign of repression, mass detention and high-technology surveillance” against Uyghur and other minorities in Xinjiang. Five other entities were added for directly supporting the Chinese military. The remaining 15 entities were added to the list for facilitating shipments to Iran and Russia. All 34 are involved in the technology sector. The move escalates U.S. trade restrictions on China in response to human rights abuses and cracks down on companies violating export regulations on Iran and Russia.
Under the new rule, U.S and non-U.S. exporters are generally prohibited from transferring goods, software, or technology subject to the U.S. Export Administration Regulations (EAR) to listed entities without first obtaining a U.S. export license. License applications involving exports or transfers to most listed companies will face a presumption of denial.
Companies doing business with the listed parties should carefully review whether these rules apply to their operations and implement controls to prevent exports, re-exports, or transfers of items to listed entities, unless licensed by BIS.