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US adds 36 Chinese entities to naughty list, drops 25 after checking it twice

The United States Department of Commerce has added 36 Chinese companies or subsidiaries to its list of companies that cannot import certain US technologies without a license, citing national security, foreign policy interests, and the possibility that some might help already banned companies to evade restrictions.

“Today we are building on the actions we took in October to protect US national security by severely restricting the People’s Republic Of China’s (PRC) ability to leverage artificial intelligence, advanced computing, and other powerful, commercially available technologies for military modernization and human rights abuses,” said under secretary Alan Estevez.

The list [PDF] doesn’t contain many names that would be known outside the Middle Kingdom. The most well-known entity on the list is China’s major flash memory maker, state-owned Yangtze Memory Technologies Co (YMTC), along with one its subsidiaries based in Japan.

YMTC is already listed on the Department’s Unverified List (UVL) and is therefore unable to procure some US wafer fab equipment and other US-made technologies. Its addition to the Entity List means there are even more supplies it cannot procure without a special license.

The canned statement explained that the move not only cracks down on PRC military modernization and human rights violations, but also key suppliers of components used in Iranian drones, as well as Russian-Belarusian military end users that supply to the Russian military.

Thirty of the entities were added for supporting modernization of China’s military, and 21 of those did so through AI chip-related activities. Another entity made the list for enabling human rights violations, and one for supporting Iranian drone production.

Four were added as they are considered a “negative impact” on US national security or foreign policy.

YMTC, a company named Hefei Core Storage Electronic Limited, and another named PXW Semiconductor Manufactory, were included “based on information indicating that these companies present a risk of diversion to parties on the Entity List.” YMTC and Hefei Core Storage are suspected of funnelling kit to Huawei and/or Hikvision Digital Technology.

Readers will be well aware that Huawei is accused of assisting Beijing to surveil the world – or at least gain a toehold in networks that let China observe its rivals. Hikvision makes video cameras considered too risky for use by UK government agencies.

At the same time the Department added the companies to the entity list, it also removed 25 after they filed paperwork proving they don’t deserve sanctions. The Department also added nine Russia-affiliated entities to its Unverified List (UVL) of organizations that can’t be assessed as worthy of permission to import or export. The nine were said not to have completed end-use checks.

A company on the UVL list has 60 days to prove the company and its products are in compliance with export rules. It gets upgraded to the Entity List if it does not meet the requirements. ®