On Monday, July 12, the U.S. Department of Commerce's Bureau of Industry and Security ("BIS") added 43 new entities under 50 entries to its Entity List. This list includes 31 entities in China, as well as entities located in Kenya, Laos, Malaysia, Pakistan, Singapore, South Africa, Thailand, the United Arab Emirates, and the United Kingdom. The same day, BIS also removed one entity from the Entity List.
Once a person is added to the Entity List, it is prohibited to export, reexport, or transfer to that person any item (including commodities, software, or technology) that is subject to the U.S. Export Administration Regulations ("EAR").
In explaining the Entity List additions, BIS cited a variety of reasons, principally that each pose potential threats to U.S. national security and their involvement in human rights abuses. BIS determined that the majority of the entities designated are either involved in recruiting Western pilots to train pilots of China's People's Liberation Army Air Force ("PLAAF"); or are engaged in hypersonic weapons development, hypersonic flight modeling, or weapon lifecycle management using software from Western countries. Per BIS, these entities, with clear ties to China's military, pose significant concerns given China's military modernization.
U.S. Assistant Secretary of Commerce for Export Enforcement Matthew S. Axelrod highlighted that "it is imperative that we prevent China from acquiring U.S. technologies and know-how to enable their military modernization programs." Other entities in the recent additions include companies that "enable the Chinese government to carry out human rights abuses against individuals in China" and also entities that have contributed to Pakistan's military modernization.
Finally, BIS removed one entity from the Entity List after review by the interagency End-User Review Committee ("ERC"), which consists of representatives from various U.S. federal government departments and determines Entity List additions and modifications.
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