BIS Adds Chinese Entities to Entity List, MEU List

The Bureau of Industry and Security added one Chinese entity to its Entity List, another to its Military End User List and removed two Russian entities from the MEU List, the agency said in a final rule. BIS added China National Offshore Oil Corporation Ltd. (CNOOC) to its Entity List for its involvement with China’s militarization of the South China Sea and designated Beijing Skyrizon Aviation Industry Investment Co., Ltd. because of its ties to China’s military. The changes are effective Jan. 14.

BIS will impose a licensing requirement for all items subject to the Export Administration Regulations that are destined for CNOOC, with some exceptions. The license requirement will not apply to certain “crude oil, condensates, aromatics, natural gas liquids, hydrocarbon gas liquids, natural gas plant liquids, refined petroleum products, liquefied natural gas, natural gas, synthetic natural gas, and compressed natural gas” identified under certain Harmonized System codes, BIS said. The license requirement also will not apply for items “required for the continued operation of joint ventures with persons from countries in Country Group A:1” of the EAR that are not operating in the South China Sea.

BIS said it will impose a license review policy of presumption of denial for shipments to the company. It also said no license exceptions will be available for exports, reexports or transfers to the entity.

CNOOC “acts as a bully” for China's People’s Liberation Army to intimidate neighboring countries and allows the government to benefit from civil-military fusion, Commerce Secretary Wilbur Ross said Jan. 15. “China's reckless and belligerent actions in the South China Sea and its aggressive push to acquire sensitive intellectual property and technology for its militarization efforts are a threat to U.S. national security and the security of the international community,” Ross said.

BIS said shipments to Beijing Skyrizon Aviation will be subject to a license requirement if they contain certain items subject to the EAR. BIS said it will impose a license review policy of presumption of denial, and only one license exception will be available: License Exception Governments, international organizations, international inspections under the Chemical Weapons Convention, and the International Space Station.

Ross said Skyrizon tries to “acquire and indigenize foreign military technologies,” which threatens U.S. national security. “This action serves to warn the export community of Skyrizon’s significant ties to the People’s Liberation Army,” Ross said.

BIS also removed Russia-based Korporatsiya Vsmpo Avisma OAO and Molot Oruzhie from the MEU List. The agency said Korporatsiya Vsmpo Avisma OAO was a duplicate listing of Korporatsiya VSMPO AVISMA, an entity that was considered for inclusion on the MEU List but ultimately not included because the Commerce Department’s End User Review Committee determined it was not a military end-user. BIS removed Molot Oruzhie because it was already listed on BIS’s Entity List and “therefore did not require being additionally listed on the MEU List.”

All exports and reexports that now require a license as a result of these changes that were aboard a carrier to a port as of Jan. 14 may proceed to their destinations under the previous eligibility, BIS said.