US Sanctions Chinese Technology Supplier, Issues General License

The Office of Foreign Assets Control sanctioned the China National Electronics Import & Export Corp. (CEIEC), a Chinese state-owned company that exports advanced technologies and technical expertise globally, OFAC said Nov. 30. The agency designated CEIEC for selling technology, software and training to Venezuelan government entities, which then use the products to bolster the Nicolas Maduro regime’s “malicious cyber efforts.”

OFAC also issued General License No. 38, which authorizes certain wind-down activities and transactions with CEIEC through 12:01 a.m. EST Jan. 14, 2021. The license does not authorize “any debit to an account” of CEIEC or any entity that CEIEC owns by more than 50%. “Entering into new business” with CEIEC will not qualify as a wind-down transaction, the agency said in frequently asked questions. OFAC also said it may issue license exemptions after the general license expires.

OFAC said nondemocratic governments, including Venezuela, are using CEIEC-supplied Chinese technology to “repress political dissent within their own borders.” The company supplies cyber support and technical experts to Venezuela state-run telecommunications provider Venezuelan National Telephone Co., which helps the Maduro regime censor the internet and prevent “the internal dissemination of content deemed undesirable by political leadership.”

OFAC said CEIEC has more than 200 subsidiaries and offices around the world that may be captured by the sanctions. “The illegitimate Maduro regime’s reliance on entities like CEIEC to advance its authoritarian agenda further illustrates the regime’s prioritization of power over democratic values and processes,” Treasury Secretary Steven Mnuchin said. “The United States will not hesitate to target anyone helping to suppress the democratic will of the Venezuelan people and others around the world.”

Secretary of State Mike Pompeo said Chinese companies such as CEIEC “lead the world” in exporting technologies that censor and surveil the internet. “With this latest action, the United States reaffirms its commitment to promoting accountability for all those complicit in the illegitimate Maduro regime’s efforts to undermine democracy,” Pompeo said.