On March 25, 2025, the U.S. Department of Commerce Bureau of Industry and Security ("BIS") released two final rules that announced the addition of 80 new entities to the Entity List (see BIS press release here). In its press release, BIS officials stated that the Entity List is only one of the powerful tools at their disposal, signaling the likelihood of more actions under BIS' regulatory authorities.
The two BIS' final rules are among BIS' first regulatory actions, and take effect immediately, adding 12 entities to the Entity List: 11 under the destination of China and one under the destination of Taiwan. The newly added entities include six subsidiaries of a leading Chinese cloud computing and big data service provider whose parent entity was added to the Entity List in 2023, four entities supporting a major Chinese server manufacturer designated on the Entity List in 2019 for building supercomputers, and two Chinese AI and advanced computing chips companies that supported Chinese military modernization. All the entities added under this rule include a footnote 4 designation, which means that these entities are now subject to the Entity List Foreign Direct Product (FDP) Rule (see § 734.9(e)(2) of the Export Administration Regulations (EAR)), and the scope of items restricted for export, reexport, or transfer to them is even broader. This rule is effective as of March 25, 2025.
The second final rule added 68 new entities to the Entity List: 42 under the destination of China, 19 under Pakistan, four under the UAE, three under South Africa, and two under Iran (two entities have China and Iran addresses). The final rule also modified four existing entities. All exports to these entities of items "subject to the EAR" now require a license, and BIS will review these license applications under a either a presumption or policy of denial.
Among the reasons that BIS cited for the addition of the new entities include:
- Their contributions to Pakistan's unsafeguarded nuclear activities and ballistic missile program;
- China's quantum technology capabilities and military modernization efforts, including training Chinese military forces in South Africa;
- Iran's defense industry and unmanned aerial vehicle programs.
This final rule is effective March 28, 2025.
BIS' addition of these entities to the Entity List signals early national security priorities for the Trump Administration, including: (1) restricting China's technological advancement; (2) limiting support for China's military modernization; (3) increasing pressure on Iran; and (4) supporting the nonproliferation of nuclear activities, specifically tied to Pakistan in this case.
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