BIS Adds 43 to Entity List for Aiding Chinese Military, Pakistan Weapons Development

The Bureau of Industry and Security added 43 entities to the Entity List this week, including companies conducting various activities that either support China’s military or allow the government to “carry out human rights abuses.” Other entities were added for supporting Pakistan’s ballistic missile program or other weapons capabilities.

The additions, outlined in a final rule effective June 12, include various Chinese aerospace and technology companies as well as flight training academies. BIS added some of the entities for providing training to Chinese military pilots using Western and “NATO sources,” including by recruiting Western pilots to provide training on Western “aircraft maneuvers and tactics.”

Other entities illegally acquired or tried to acquire U.S.-origin items “in support of China’s military modernization.” BIS said those entities “have demonstrable ties to activities of concern,” including hypersonic weapons development, design and manufacture of missiles, hypersonic flight modeling and “weapon lifecycle management using Western software.”

Other Chinese entities -- including Belt Consulting Co., Ltd.; Shanghai Breeze Technology Co., and Shanghai Shark Sprite Technology Co., Ltd. -- were added for being “implicated in a conspiracy to violate U.S. export laws and regulations.” BIS said they worked to supply China’s army and navy with U.S. military grade vessels and equipment.

The agency singled out Shanghai Supercomputing Technology Co., Ltd. for trying to purchase U.S. items to support China’s military modernization efforts, subjecting the company to foreign direct product rule restrictions. BIS said it supports the “operation of supercomputers” in China, “specifically by offering cloud-based supercomputing capabilities to support hypersonics research.”

Preventing “advanced technologies from being used as part of China’s civil-military fusion strategy and threatening U.S. national security is our top priority,” said BIS Undersecretary Alan Estevez. Matthew Axelrod, the top export enforcement official at BIS, called it “imperative that we prevent China from acquiring U.S. technologies and know-how to enable their military modernization programs.”

BIS added another group of Chinese entities to the list for supplying export-controlled items to China that allow the government to commit human rights abuses as part of its “campaign of repression” against Uyghurs and other minority groups in Xinjiang. The items include mobile phone inspection software, fingerprint analysis technology, biostatistics software and DNA testing items delivered to Public Security bureaus throughout China. Other illegal exports have included “biotechnology items” to China’s Xinjiang Production and Construction Corps, which is already on the Entity List and subject to financial sanctions on the Treasury Department’s Specially Designated Nationals List.

The addition sends “a clear message that we will use our tools to protect national security and human rights,” said Thea Kendler, BIS’ assistant secretary for export administration.

The agency also added entities for making “contributions” to Pakistan’s ballistic missile program or for “significantly” contributing to the country’s “advanced conventional weapons and strategic weapons capabilities.”

The entities face a license requirement for all items subject to the Export Administration Regulations. Most of the entities will face a license review policy of presumption of denial, while others will be subject to license review policies outlined in the EAR’s restrictions on nuclear-end uses and rocket systems.

BIS also removed Latvia-based Fiber Optic Solution from the Entity List “based on information” it received.

All exports that now require a license as a result of this rule that were aboard a carrier to a port as of June 12 may proceed to their destinations under the previous eligibility as long as the items have been exported before July 12, BIS said. Any items not exported before midnight July 12 will require a license.