International Trade Today is a Warren News publication.
Subscriber Login

BIS Adds 77 Entities to Entity List, Including China's SMIC

December 21, 2020 by Ian Cohen|Top News

The Bureau of Industry and Security added 77 entities and people to the Entity List, including China’s top chipmaker, to further prevent China and other countries from acquiring sensitive U.S. technologies, the agency said Dec. 18. Along with China’s Semiconductor Manufacturing International Corporation, the Entity List additions include China-based DJI, one of the world’s largest drone makers, and companies in Bulgaria, France, Germany, Hong Kong, Italy, Malta, Pakistan, Russia and the United Arab Emirates.

Sign up for a free preview to unlock the rest of this article

If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.

Start My Free Preview

BIS listed a range of reasons for adding the companies, saying they either have ties to China’s military, are involved in human rights abuses, support China's militarization of the South China Sea, steal U.S. trade secrets or violate U.S. export controls. The notice also revised one existing entry under China and Pakistan and removed four entries under the UAE and Israel.

BIS said it will impose a licensing review policy of presumption of denial for shipments to SMIC that include “items uniquely required to produce semiconductors at advanced technology nodes 10 nanometers or below.” For technology nodes above 10 nanometers, BIS will impose a case-by-case license review policy, a senior Commerce Department official told reporters during a Dec. 18 call. Four other entities added to the list will be subject to a case-by-case license review policy for certain items used to detect and treat infectious diseases, and two entities will be subject to license restrictions for certain nuclear end-uses. The majority of the 77 entities will be subject to a policy of presumption of denial.

The Commerce official said the restrictions on SMIC are preemptive because the company is “primarily producing at higher, older legacy technology nodes” and don’t yet have the technologies needed to produce at lower nodes. “For them to get to production levels at 10 nanometers and below, they certainly would need a U.S. tool,” the official said during the press call. “So this is really a forward-looking technology redline that we’ve established.”

Another Commerce official said the agency added SMIC to the Entity List because it has “hard evidence” that SMIC’s clients are using their chips to support the Chinese military. The official said Commerce has been working with SMIC “over the last several months” but has been “unable to come up with a solid solution to address our concerns.” Commerce plans to keep working with SMIC, the official said during the call. “We want to keep that conversation open.” SMIC didn't comment.

The official said the U.S. plans to work with U.S. industry and ensure “open lines of communication,” saying all companies will get a “fair hearing” and be allowed to “explain the intents of their exports” when applying for a license. Commerce is also working with allies to push for multilateral restrictions against SMIC, the official said. “We are working closely with like-minded governments to achieve a uniform approach to this.”

Commerce is not coordinating with the Joe Biden transition team on these controls but is speaking with them to get them brought up to speed, one of the officials said. The Biden team is “still learning and setting up their personnel,” that official said. “I'm very confident they will understand the national security imperative behind the actions that we're taking today,” the official added. “They will have to decide what sorts of actions that they will take to ensure that our national security interests are protected.”

A Chinese spokesperson said the restrictions will harm both Chinese and U.S. companies. “We urge the U.S. side to stop its wrong behavior of oppression of foreign companies,” a Foreign Ministry spokesperson said Dec. 18, according to a transcript provided in English of a regular press conference. “China will continue to take necessary measures to safeguard the legitimate rights and interests of Chinese companies.”

All exports and reexports that now require a license as a result of the Entity List additions that were aboard a carrier to a port as of Dec. 22 may proceed to their destinations under the previous eligibility, BIS said.

The 77 entities -- added under 78 entries because one entity is being added under two entries -- are:

  • Dimitar Milanov Dimitrov
  • Mariana Marinova Gargova
  • Milan Dimitrov
  • Multi Technology Integration Group EOOD (MTIG)
  • AGCU Scientech
  • Beijing Institute of Technology
  • Beijing University of Posts and Telecommunications (BUPT)
  • China Communications Construction Company Ltd.
  • China National Scientific Instruments and Materials (CNSIM);
  • China State Shipbuilding Corporation, Limited (CSSC) 7th Research Academy
  • China State Shipbuilding Corporation, Limited (CSSC) 12th Research Institute
  • China State Shipbuilding Corporation, Limited (CSSC) 701st Research Institute
  • China State Shipbuilding Corporation, Limited (CSSC) 702nd Research Institute
  • China State Shipbuilding Corporation, Limited (CSSC) 703rd Research Institute
  • China State Shipbuilding Corporation, Limited (CSSC) 704th Research Institute
  • China State Shipbuilding Corporation, Limited (CSSC) 705th Research Institute
  • China State Shipbuilding Corporation, Limited (CSSC) 707th Research Institute
  • China State Shipbuilding Corporation, Limited (CSSC) 709th Research Institute
  • China State Shipbuilding Corporation, Limited (CSSC) 710th Research Institute
  • China State Shipbuilding Corporation, Limited (CSSC) 711th Research Institute
  • China State Shipbuilding Corporation, Limited (CSSC) 712th Research Institute
  • China State Shipbuilding Corporation, Limited (CSSC) 713th Research Institute
  • China State Shipbuilding Corporation, Limited (CSSC) 714th Research Institute
  • China State Shipbuilding Corporation, Limited (CSSC) 715th Research Institute
  • China State Shipbuilding Corporation, Limited (CSSC) 716th Research Institute
  • China State Shipbuilding Corporation, Limited (CSSC) 717th Research Institute
  • China State Shipbuilding Corporation, Limited (CSSC) 718th Research Institute
  • China State Shipbuilding Corporation, Limited (CSSC) 719th Research Institute
  • China State Shipbuilding Corporation, Limited (CSSC) 723rd Research Institute
  • China State Shipbuilding Corporation, Limited (CSSC) 724th Research Institute
  • China State Shipbuilding Corporation, Limited (CSSC) 725th Research Institute
  • China State Shipbuilding Corporation, Limited (CSSC) 726th Research Institute
  • China State Shipbuilding Corporation, Limited (CSSC) 750th Test Center
  • China State Shipbuilding Corporation, Limited (CSSC) 760th Research Institute
  • Chongqing Chuandong Shipbuilding Industry Co Ltd.
  • Chong Zhou
  • CSSC Huangpu Wenchong Shipbuilding Co., Ltd.
  • DJI
  • Guangxin Shipbuilding and Heavy Industry Co., Ltd.
  • Guangzhou Taicheng Shipbuilding Industry Co., Ltd.
  • Huisui Zhang
  • Jiangsu Hengxiang Science and Education Equipment Co., Ltd.
  • Jinping Chen
  • Kuang-Chi Group
  • Nanjing Asset Management Co., Ltd.
  • Nanjing University of Aeronautics and Astronautics
  • Nanjing University of Science and Technology
  • Ningbo Semiconductor International Corporation (NSI)
  • ROFS Microsystems
  • Semiconductor Manufacturing International (Beijing) Corporation
  • Semiconductor Manufacturing International Corporation (SMIC)
  • Semiconductor Manufacturing International (Shenzhen) Corporation
  • Semiconductor Manufacturing International (Tianjin) Corporation
  • Semiconductor Manufacturing South China Corporation
  • SJ Semiconductor
  • SMIC Holdings Limited
  • SMIC Northern Integrated Circuit Manufacturing (Beijing) Co., Ltd.
  • SMIC Semiconductor Manufacturing (Shanghai) Co., Ltd.
  • Tianjin Micro Nano Manufacturing (MNMT)
  • Tianjin University
  • Tongfang NucTech Technology Ltd.
  • Wei Pang
  • Zhao Gang
  • France Tech Services
  • Satori Corporation
  • Maintenance Services International (MSI) GmbH
  • MRS GmbH
  • SMIC Hong Kong International Company Limited
  • Zigma Aviation
  • Feroz Ahmed Akbar
  • Sparx Air Ltd.
  • Geo Research
  • Link Lines (Pvt.) Limited
  • Cosmos Complect
  • Ilias Kharesovich Sabirov
  • OOO Sovtest Comp
  • Satori Corporation
  • Sky Float Aviation FZE.