By Rebecca Yeager, Export Solutions

BIS Adds Seven Entities To The Entity List

On April 8, 2021, the Biden Administration added seven entities to the Entity List.  These companies were added based on information that they are “involved, or pose a significant risk of being or becoming involved in activities contrary to the national security or foreign policy interests of the United States.”

Below are the companies that were added to the Entity List:

  • National Supercomputing Center Jinan
  • National Supercomputing Center Shenzhen
  • National Supercomputing Center Wuxi
  • National Supercomputer Center Zhengzhou
  • Shanghai HighPerformance Integrated Circuit Design Center
  • Sunway Microelectronics and
  • Tianjin Phytium Information Technology

Within a day of the additions to the entity list, there was also an article in the Washington Post by Ellen Nakashima and Gerry Shih concerning a high tech military facility whose supercomputer is powered by chips designed by Phytium, one of the entities recently added to the list. Numerous other news reports detailed the technology risk with China tech companies.

What Do Exporters Need To Do With The BIS Entity List Additions?

When any changes arise in export compliance, it is important for exporters to review how those changes affect their current program and determine how to proceed to best protect their company.

Here are five tips to assist you in navigating these recent additions:

1. Determine if you do business with these companies

If so, immediately put all orders and shipments on hold.  Any exports to these parties will require a license from the U.S. Department of Commerce and there is a “presumption of denial” for any license applications. Never move forward with a transaction due to pressure from another internal business unit or department. Doing so puts your company at risk of fines and/or debarment. It just isn’t worth it.

2. Screen All Parties To The Transaction

This includes screening both the name and the address for full protection. If you receive a hit or match to a restricted party, place the shipment on hold and review the hit carefully to determine if you have a true hit or a false positive. A strong compliance program will include a process to pause the transaction while a potential match is being reviewed.

3. Understand The Different U.S. Agencies Associated With China Restricted Parties

There is no one list to check, which makes screening list by list complicated. Using the Consolidated List or a screening tool will make screening much more efficient, accurate, and timely. Below is a list of the governing agencies associated with Chinese restricted parties. It’s a good idea to review your screening tool to ensure these lists are being including in the screening process.

    • OFAC
    • Department of Commerce Entity List
    • Department of Commerce Military End User List
    • Department of Commerce Military Intelligence End User List
    • DOD Communist Chinese Military Companies

4. Stay Aware

In the last 3 years, 80% of restricted entities added were Chinese Entities. Entities from around the world are added to the lists daily. Because these lists are always changing, it is crucial to rely on only the latest lists. If you have a paper list you use as a cheat sheet, fold that up into a paper airplane and send it on it’s way. Destination: Recycling bin. Your business is too important for that.

5. Conduct A Risk Assessment

Assessing your export compliance program is vital to maintaining compliance and minimizing risk. We recommend assessing your program on an annual basis. This is especially critical when regulations change. If it isn’t quite time for an annual audit/assessment, conduct a quick review of your program, taking into account the increased restrictions on exports to China, looking at how these restrictions affect your company and where you might need to strengthen your process to account for the changes.

Export Solutions can assist you with this process through an on-site assessment of your company or through a virtual trade compliance audit. You won’t even need to leave your desk!

Compliance is an ever-changing, fast-paced world, especially when it comes to China. If you need assistance navigating these changes, contact Export Solutions for a free consultation.

Rebecca Yeager is a Trade Compliance Consultant for Export Solutions -- a full-service consulting firm that specializes in helping companies comply with U.S. and international import/export regulations.