BIS Fines US Chip Equipment Maker for Illegal Shipments to Entity List Companies

The Bureau of Industry and Security fined a U.S. semiconductor manufacturer $469,060 for working with others to export chip-making equipment to Chinese companies on the U.S. Entity List, BIS said in an Aug. 16 order. The company, California-based Dynatex International, violated the Export Administration Regulations because it didn’t obtain the required BIS license before shipping the equipment. Although BIS said Dynatex knew it was shipping items to blacklisted companies, the agency substantially reduced the fine as part of a settlement agreement.

BIS said Dynatex “conspired with others known and unknown” between 2015 and 2020 to illegally export semiconductor manufacturing equipment designated subject to the EAR. The company exported a “DTX-150 MDB scribe and break tool and associated consumables and accessories” to Chengdu GaStone Technology Company (also known as Chengdu HiWafer Semiconductor) and China Electronics Technology Group Corporation 55th Research Institute. The total value of the exports was more than $230,000, BIS said.

Before exporting the goods, BIS said, Dynatex was informed that CGTC was on a “black list,” BIS said, and sought clarification about whether it could ship the scriber breaker machine to CGTC. Dynatex was also “informed that CGTC’s name should not be shown on shipping documents,” but BIS said Dynatex “erroneously responded that they could continue with the transaction” because CGTC “was not their customer, but that of their distributor.” BIS said Dynatex continued to export semiconductor equipment to both companies after it found out they were on the Entity List. The company said it “did not understand the license requirement to apply to consumables and accessories.”

Under the settlement agreement, Dynatex must pay $50,000 to Commerce within 30 days from the order date. BIS will suspend the remaining $419,060 “upon the first to occur of the following”: Dynatex dissolves or ceases its business operations, Dynatex sells the majority of its assets to a U.S. company that employs export control compliance policies, or Dynatex completes a one-year probationary period without committing another violation of the EAR and the Export Control Reform Act and complies with the other terms of the settlement agreement.

If Dynatex doesn’t pay its fine on time or violates any terms of the agreement, BIS said it may revoke Dynatex’s export privileges. The company didn’t comment.