The Bureau of Industry and Security this week added six entities to the Entity List for either helping to train China’s military, evading U.S. government end-use checks or shipping export-controlled items to Russia. The agency also updated its Unverified List, adding 13 new parties and removing eight others, including one Russian company that it transferred to the Entity List earlier this year. Both rules took effect July 3.
Exports to China
The Bureau of Industry and Security denied, revoked or didn't take action on about one-third of all license applications involving Chinese companies on the Entity List between 2018 and 2023, according to a snapshot of licensing data released by BIS July 2.
Although China isn’t yet directly shipping weapons and other armaments to Russia’s military, Beijing is “making, in effect, investments in Russia's defense industrial base in ways that are allowing it to continue” its war against Ukraine, said Secretary of State Antony Blinken, speaking during a July 1 event hosted by the Brookings Institution. He said 70% of the machine tools and 90% of the microelectronics being imported by Russia are coming from China.
The Office of Foreign Assets Control this week sanctioned one person in Mexico and two in China for their ties to the Sinaloa Cartel, a Mexican drug trafficking group. The designations target Mexico-based Diego Acosta Ovalle, who helped the cartel hide and collect drug trafficking money, and China-based Tong Peiji and He Jiaxuan, members of a U.S.-based Chinese money laundering organization that has laundered illegal drug proceeds belonging to the Sinaloa Cartel.
The Bureau of Industry and Security on July 1 updated its “Don’t Let This Happen to You!” guidance, a 78-page compilation of enforcement cases involving criminal and administrative export violations. Added cases involve violations of U.S. antiboycott regulations, firearms export violations, export violations related to China and Iran, noncompliance with a BIS settlement agreement, and a recent voluntary disclosure submitted by Indiana University involving illegal exports of genetically modified fruit flies (see 2406250022). “Exporters are encouraged to review the publication, which provides useful illustrations of the type of conduct that gets companies and universities in trouble,” BIS said.
The Bureau of Industry and Security will add six entities to the Entity List and update its Unverified List to include 13 new parties and remove eight others, the agency said in a pair of rules released July 2 and effective July 3.
The House last week approved an amendment to the FY 2025 State Department, Foreign Operations and Related Programs Appropriations Bill that would direct $1 million to implementing the Stop Harboring Iranian Petroleum (SHIP) Act, a new law for sanctioning Iranian oil.
While the U.S. and the EU are increasingly aligning their views on China, the two sides still don’t yet fully agree on how to use export controls, investment restrictions and other economic security tools to respond to economic and national security threats posed by Beijing, panelists during a Center for a New American Security event said last week. They also said they expect challenges facing American businesses in China to continue to grow, particularly if the U.S. pursues more trade restrictions and as Beijing builds out its anti-foreign sanctions laws.
A bill introduced last week by Rep. Andy Ogles, R-Tenn., and other Republicans would return China’s Institute of Forensic Science to the Commerce Department's Entity List. The agency removed the institute last year (see 2311160003).
The free trade agreement between China and Serbia will take effect July 1, China's Ministry of Commerce announced, according to an unofficial translation. The ministry said the deal will scrap tariffs on 90% of goods, of which over 60% will be eliminated July 1. The deal also includes chapters on "rules of origin, customs procedures and trade facilitation, sanitary and phytosanitary measures, technical barriers to trade, trade remedies, dispute settlement, intellectual property protection, investment cooperation, competition, etc.," the ministry said.