The Trump Administration Adds 77 Companies to the Entity List

On December 18, 2020, the U.S. Commerce Department’s Bureau of Industry and Security (“BIS”) placed 77 companies and individuals, most of which are China-based, on BIS’s Entity List, an action that marks a significant escalation of U.S.-China tensions before the new U.S. administration takes office on January 20, 2021.  According to BIS, many of the designations are targeted at "entities in China that enable human rights abuses, entities that supported the militarization and unlawful maritime claims in the South China Sea, entities that acquired U.S.-origin items in support of the People’s Liberation Army’s programs, and entities and persons that engaged in the theft of U.S. trade secrets."  

An Entity List designation does not prohibit U.S. or non-U.S. persons from all dealings with the listed entity; instead, these restrictions only impose licensing requirements for the export, re-export, or transfer of items subject to the U.S. Export Administration Regulations (EAR), regardless of the nationality of the company engaging in the export, reexport, or transfer of the item.  Applications for licenses to export, reexport or transfer items subject to the EAR to most entities listed today will be treated with a presumption of denial.  The U.S. Government has the authority to add individuals or organizations to the list if they are "reasonably believed to be involved, or to pose a significant risk of being or becoming involved, in activities contrary to the national security and foreign policy interests of the United States."^[1]  These are not the first entities to be added to the Entity List for these reasons, and in the waning days of this administration, they are unlikely to be the last.

The list of the designated entities can be found here: https://www.federalregister.gov/d/2020-28031.