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Commerce Targets Chinese Military-Civil Fusion Program as Seven Chinese Entities Added to the Entity List

Today, the U.S. Commerce Department’s Bureau of Industry and Security (BIS) published a final rule adding seven Chinese entities to the Entity List. The U.S. government determined these seven entities, primarily supporting the Chinese aerospace and space industries, had acted “contrary to national security and foreign policy interests of the United States.” BIS stated that the entities were acquiring or attempting to acquire U.S.-origin items to support China’s military modernization campaign. These seven entities bring the total number of listed Chinese entities to approximately 600.

The seven Chinese entities are:

  • China Aerospace Science and Technology Corporation (CASC) 9th Academy 771 Research Institute
  • China Aerospace Science and Technology Corporation (CASC) 9th Academy 772 Research Institute
  • China Academy of Space Technology 502 Research Institute
  • China Academy of Space Technology 513 Research Institute
  • China Electronics Technology Group Corporation 43 Research Institute
  • China Electronics Technology Group Corporation 58 Research Institute
  • Zhuhai Orbita Control Systems

All seven entities will be subject to a license requirement for all items subject to the Export Administration Regulations (EAR). Those license applications will be reviewed under a presumption of denial. Importantly, this license requirement pertains to any U.S. or non-U.S. party seeking to send EAR-controlled items to any of these named entities. The restrictions thus expand well beyond the borders of the United States.

The additions are part of a broader push to ensure sensitive technologies are not diverted to the Chinese military-civil fusion program. Similarly, in April 2022, BIS announced it had added seven supercomputer companies to the Entity List to slow the Chinese military’s technological advancements.

“Technology is value neutral, and that’s why we exercise constant vigilance with respect to China, particularly in sectors like aerospace, where the potential for diversion to military applications is so high,” said Assistant Secretary of Commerce for Export Administration Thea D. Rozman Kendler in a press release announcing the addition. “The Entity List is a powerful tool—though not our only tool—for demonstrating that the U.S. government will not hesitate to use export controls to protect U.S. national security,” Kendler added.

The Commerce Department will continue to monitor the activities of foreign organizations as they relate to the Chinese military and act accordingly. American and foreign companies should review their customer lists to ensure that they do not deliver items subject to the EAR to those organizations on the Entity List. Failure to screen customers and other export partners appropriately can lead to significant potential liability.

If you have any questions or need assistance related to this evolving situation or other international trade matters, please contact the author.

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