In this rule, the Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) by adding seventy-seven entities, under a total of seventy-eight entries, to the Entity List. These seventy-seven entities have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States. These entities will be listed on the Entity List under the destinations of the People's Republic of China (China), Bulgaria, France, Germany, Hong Kong, Italy, Malta, Pakistan, Russia, and the United Arab Emirates (U.A.E.). This rule also revises one existing entry on the Entity list under the destination of China and one under the destination of Pakistan. Finally, this rule removes a total of four entities under the destinations of Israel and the U.A.E. The removals are made in connection with requests for removal that BIS received pursuant to the EAR and a review of information provided in those requests. Show DATES:This rule is effective December 18, 2020. Start Further Info FOR FURTHER INFORMATION CONTACT:Chair, End-User Review Committee, Office of the Assistant Secretary, Export Administration, Bureau of Industry and Security, Department of Commerce, Phone: (202) 482–5991, Fax: (202) 482–3911, Email: [email protected]. End Further Info End Preamble SUPPLEMENTARY INFORMATION:BackgroundThe Entity List (supplement No. 4 to part 744 of the Export Administration Regulations (EAR)) identifies entities for which there is reasonable cause to believe, based on specific and articulable facts, that the entities have been involved, 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. The EAR (15 CFR parts 730–774) impose additional license requirements on, and limit the availability of most license exceptions for, exports, reexports, and transfers (in-country) to listed entities. The license review policy for each listed entity is identified in the “License review policy” column on the Entity List, and the impact on the availability of license exceptions is described in the relevant Federal Register notice adding entities to the Entity List. BIS places entities on the Entity List pursuant to part 744 (Control Policy: End-User and End-Use Based) and part 746 (Embargoes and Other Special Controls) of the EAR. The End-User Review Committee (ERC), composed of representatives of the Departments of Commerce (Chair), State, Defense, Energy and, where appropriate, the Treasury, makes all decisions regarding additions to, removals from, or other modifications to the Entity List. The ERC makes all decisions to add an entry to the Entity List by majority vote and all decisions to remove or modify an entry by unanimous vote. ERC Entity List DecisionsAdditions to the Entity ListUnder § 744.11(b) (Criteria for revising the Entity List) of the EAR, entities for which there is reasonable cause to believe, based on specific and articulable facts, that the entities have been involved, are involved, or pose a significant risk of being or becoming involved in activities that are contrary to the national security or foreign policy interests of the United States, and those acting on behalf of such entities, may be added to the Entity List. Paragraphs (b)(1) through (5) of § 744.11 provide an illustrative list of activities that could be considered contrary to the national security or foreign policy interests of the United States. This rule implements the decision of the ERC to add seventy-seven entities, under a total of seventy-eight entries, to the Entity List; one of these entities is being added under two entries. These seventy-seven entities will be listed on the Entity List under the following destinations, as applicable, China, Bulgaria, France, Germany, Hong Kong, Italy, Malta, Pakistan, Russia, and the U.A.E. The ERC made the decision to add each of the seventy-seven entities described below under the standard set forth in § 744.11(b) of the EAR. The ERC determined that the seventy-seven subject entities are engaging in or enabling activities contrary to U.S. national security and foreign policy interests, as follows: Semiconductor Manufacturing International Corporation Incorporated (SMIC) is added to the Entity List as a result of China's military-civil fusion (MCF) doctrine and evidence of activities between SMIC and entities of concern in the Chinese military industrial complex. The Entity List designation limits SMIC's ability to acquire certain U.S. technology by requiring exporters, reexporters, and in-country transferors of such technology to apply for a license to sell to the company. Items uniquely required to produce semiconductors at advanced technology nodes 10 nanometers or below will be subject to a presumption of denial to prevent such key enabling technology from supporting China's military modernization efforts. This rule adds SMIC and the following ten entities related to SMIC: Semiconductor Manufacturing International (Beijing) Corporation; Semiconductor Manufacturing International (Tianjin) Corporation; Semiconductor Manufacturing International (Shenzhen) Corporation; SMIC Semiconductor Manufacturing (Shanghai) Co., Ltd.; SMIC Holdings Limited; Semiconductor Manufacturing South China Corporation; SMIC Northern Integrated Circuit Manufacturing (Beijing) Co., Ltd.; SMIC Hong Kong International Company Limited; SJ Semiconductor; and Ningbo Semiconductor International Corporation (NSI). The ERC determined to add the entities AGCU Scientech; China National Scientific Instruments and Materials (CNSIM); DJI; and Kuang-Chi Group for activities contrary to U.S. foreign policy interests. Specifically, these four entities have enabled wide-scale human rights abuses within China through abusive genetic collection and Start Printed Page 83417 analysis or high-technology surveillance, and/or facilitated the export of items by China that aid repressive regimes around the world, contrary to U.S. foreign policy interests. The ERC determined that China Communications Construction Company Ltd. has enabled China to reclaim and militarize disputed outposts in the South China Sea, which has been detrimental to U.S. national security. In particular, this entity has engaged in reclaiming land at Mischief Reef, which pursuant to a July 12, 2016, ruling by the Hague-based Permanent Court of Arbitration, was determined to be part of the Philippine exclusive economic zone and continental shelf. In addition, the ERC determined that Chongqing Chuandong Shipbuilding Industry Co., Ltd.; CSSC Huangpu Wenchong Shipbuilding Co., Ltd.; Guangxin Shipbuilding and Heavy Industry Co., Ltd.; and Guangzhou Taicheng Shipbuilding Industry Co., Ltd. are involved in China's efforts to assert its unlawful maritime claims in the South China Sea, as well as efforts to intimidate and coerce other coastal states from accessing and developing offshore marine resources. As a result, those entities are added to the Entity List as well. The ERC determined to add China State Shipbuilding Corporation, Ltd. (CSSC) 7th Research Academy, CSSC 12th Research Institute, CSSC 701st Research Institute, CSSC 702nd Research Institute, CSSC 703rd Research Institute, CSSC 704th Research Institute, CSSC 705th Research Institute, CSSC 707th Research Institute, CSSC 709th Research Institute, CSSC 710th Research Institute, CSSC 711th Research Institute, CSSC 712th Research Institute, CSSC 713th Research Institute, CSSC 714th Research Institute, CSSC 715th Research Institute, CSSC 716th Research Institute, CSSC 717th Research Institute, CSSC 718th Research Institute, CSSC 719th Research Institute, CSSC 723rd Research Institute, CSSC 724th Research Institute, CSSC 725th Research Institute, CSSC 726th Research Institute, CSSC 750th Test Center, and CSSC 760th Research Institute to the Entity List for acquiring and attempting to acquire U.S.-origin items in support of programs for the People's Liberation Army. These activities are contrary to national security and foreign policy interests under Section 744.11(b) of the EAR. The ERC determined to add Beijing Institute of Technology; Nanjing University of Science and Technology; Nanjing University of Aeronautics and Astronautics; Nanjing Asset Management Co., Ltd.; and Jiangsu Hengxiang Science and Education Equipment Co., Ltd. to the Entity List for acquiring and attempting to acquire U.S.-origin items in support of programs for the People's Liberation Army. This activity is contrary to national security and foreign policy interests under section 744.11(b) of the EAR. The ERC determined to add the entity Tongfang Technology Ltd. (NucTech) to the Entity List for its involvement in activities that are contrary to the national security interests of the United States. Specifically, the ERC determined NucTech's lower performing equipment impair U.S. efforts to counter illicit international trafficking in nuclear and other radioactive materials. Lower performing equipment means less stringent cargo screening, raising the risk of proliferation. The ERC determined that Beijing University of Posts and Telecommunications directly participates in the research and development, and production, of advanced weapons and advanced weapons systems in support of People's Liberation Army modernization, which poses a direct threat to U.S. national security. These entities enabled the People's Republic of China to advance military modernization goals, in part, through the import of technology and equipment that is used in developing advanced weapons programs in China. The ERC determined to add ROFS Microsystems; Tianjin Micro Nano Manufacturing; Tianjin University; and the individuals Chong Zhou; Huisui Zhang; Jinping Chen; Wei Pang; and Zhao Gang because there is reasonable cause to believe that these individuals, in coordination with Tianjin University through its College of Precision Instruments and Optoelectronic Engineering Tianjin Micro Nano Manufacturing, and ROFS Microsystems, systematically coordinated and committed more than a dozen instances of theft of trade secrets from U.S. corporations. On April 1, 2015, those five individuals were indicted on thirty counts including conspiracy to commit economic espionage, conspiracy to commit theft of trade secrets, economic espionage, aiding and abetting and theft of trade secrets. The indictment stated that individuals associated with ROFS and others developed a scheme by which the sources and origins of the trade secrets stolen from Avago and Skyworks would be disguised and the technology contained within those trade secrets be used by entities in the PRC to develop products for civilian and military use. Pursuant to § 744.11(b) of the EAR, the ERC determined that the conduct of these entities raise sufficient concern that necessitates prior review of exports, re-exports or transfers (in-country) of items subject to the EAR involving these persons and companies. The ERC determined to add the entities Zigma Aviation Services; MRS GmbH; France Tech Services; Maintenance Services International GmbH; and Satori Corporation to the Entity List on the basis of actions and activities they have engaged in that are contrary to the national security and foreign policy interests of the United States. Specifically, these companies provided aircraft parts, without the necessary licenses, to one entity—Mahan Air—that is listed as a Specially Designated National per the U.S. Department of Treasury's Office of Foreign Assets Control. The ERC determined to add OOO Sovtest Comp; Cosmos Complect; Multi Technology Integration Group EOOD (MTIG) and four associated individuals Dimitar Milanov Dimitrov; Ilias Kharesovich Sabirov; Mariana Marinova Gargova; and Milan Dimitrov; to the Entity List on the basis of their attempts to procure and re-export U.S.-origin items, for activities contrary to the national security and foreign policy interests of the United States. The ERC determined that there is reasonable cause to believe, based on specific and articulable facts, that OOO Sovtest Comp and Cosmos Complect used MTIG as a front company to acquire both radiation-hardened parts and other sensitive electronic components and re-export those U.S.-origin components to Russia without required licenses. The ERC determined these entities are engaging in conduct that poses a risk of violating the EAR such that, pursuant to § 744.11(b)(5) of the EAR prior review of exports and re-exports involving these parties, and the possible imposition of license conditions or license denial, enhances BIS's ability to prevent violations of the EAR. The ERC determined to add the entities Link Lines (Pvt.) Limited and Geo Research to the Entity List on the basis of their participation in the procurement and attempted procurement of items, to include U.S.-origin items, for entities on the Entity List without obtaining the necessary licenses. The ERC determined to add Sparx Air Ltd., Sky Float Aviation FZE, and Feroz Ahmed Akbar to the Entity List for engaging in conduct contrary to the national security and foreign policy interests of the United States. Specifically, the ERC determined that there is reasonable cause to believe, based on specific and articulable facts, that these entities were involved in a Start Printed Page 83418 scheme to falsify information in order to obtain and divert U.S.-origin items without authorization. The ERC thereby determined these entities to be unreliable recipients of U.S.-origin items. Pursuant to § 744.11(b), the ERC determined that the conduct of the above-described seventy-seven entities raises sufficient concerns that prior review, via the imposition of a license requirement, of exports, reexports, or transfers (in-country) of all items subject to the EAR involving these entities, and the possible issuance of license denials or the possible imposition of license conditions on shipments to these entities, will enhance BIS's ability to prevent violations of the EAR or otherwise protect U.S. national security or foreign policy interests. For the seventy-seven entities added to the Entity List in this final rule, BIS imposes a license requirement that applies to all items subject to the EAR. In addition, no license exceptions are available for exports, reexports, or transfers (in-country) to the persons being added to the Entity List in this rule. For two of the seventy-seven entities—Geo Research and Link Lines (Pvt) Limited—BIS imposes the license review policy set forth in § 744.2(d) (restrictions on certain nuclear end-uses) of the EAR. For four of the seventy-seven entities—AGCU Scientech, China National Scientific Instruments and Materials (CNSIM), DJI and Kuang-Chi Group—BIS imposes a license review policy of case by case review for items necessary to detect, identify and treat infectious disease and a presumption of denial for all other items subject to the EAR. For eleven of the seventy-seven entities—SMIC and ten related entities—BIS imposes a license review policy of Presumption of Denial for items uniquely required for production of semiconductors at advanced technology nodes (10 nanometers and below, including extreme ultraviolet technology) and case by case for all other items. For the other sixty entities added to the Entity List by this rule, BIS imposes a license review policy of a presumption of denial. The acronym “a.k.a.” (also known as) is used in entries on the Entity List to identify aliases, thereby assisting exporters, reexporters, and transferors in identifying entities on the Entity List. For the reasons described above, this final rule adds the following seventy-seven entities, under a total of seventy-eight entries, to the Entity List: Bulgaria
• Milan Dimitrov; and
China
• Wei Pang; and
France• France Tech Services; andStart Printed Page 83419
Germany• Maintenance Services International (MSI) GmbH; and
Hong Kong
Italy
Malta• Feroz Ahmed Akbar; and
Pakistan• Geo Research, and
Russia
• Ilias Kharesovich Sabirov; and
United Arab Emirates• Satori Corporation; and
Revisions to the Entity ListThis final rule revises two existing entries, one under the destination China and one under the destination of Pakistan, as follows: This rule implements a revision to one existing entry for “China Shipbuilding Group 722nd Research Institute,” first added to the Entity List under the destination of China on August 27, 2020 (85 FR 52901). BIS is revising the existing entry under China by revising the name and one alias. The ERC decided to modify the existing entry for China Shipbuilding Group 722nd Research Institute under China to reflect its correct organizational structure. The modification incorporates nomenclature into the existing Entity List entry that standardizes this entry with the 25 CSSC research institutes described above being added in this final rule. This rule implements a revision to one existing entry for “Oriental Engineers,” first added to the Entity List under the destination of Pakistan on May 26, 2017 (82 FR 24245). BIS is revising the existing entry under Pakistan by adding four aliases and six addresses. The ERC determined to modify the existing entry for Oriental Engineers under Pakistan to account for additional aliases and addresses. Removals From the Entity ListThis rule implements a decision of the ERC to remove “Ben Gurion University,” one entity located in Israel, from the Entity List on the basis of a removal request. The entry for Ben Gurion University was added to the Entity List on February 3, 1997 (62 FR 4910). This rule also implements a decision of the ERC to remove “Dow Technology” “Hassan Dow” and “Modest Marketing LLC”, three entities located in the U.A.E., from the Entity List on the basis of removal requests. The entries for “Dow Technology” and “Hassan Dow” were added to the Entity List on February 23, 2016 (81 FR 8829). The entry for Modest Marketing LLC was added to the Entity List on January 26, 2018 (83 FR 3580). The ERC decided to remove these four entries based on information BIS received pursuant to § 744.16 of the EAR and the review the ERC conducted in accordance with procedures described in supplement No. 5 to part 744. This final rule implements the decision to remove the following four entities, consisting of one entity located in Israel and three in the U.A.E., from the Entity List: Israel
United Arab Emirates
• Hassan Dow; and
Savings ClauseShipments of items removed from eligibility for a License Exception or export or reexport without a license (NLR) as a result of this regulatory action that were en route aboard a carrier to a port of export or reexport, on December 22, 2020, pursuant to actual orders for export or reexport to a foreign destination, may proceed to that destination under the previous eligibility for a License Exception or export or reexport without a license (NLR). Export Control Reform Act of 2018On August 13, 2018, the President signed into law the John S. McCain National Defense Authorization Act for Fiscal Year 2019, which included the Export Control Reform Act of 2018 (ECRA) (50 U.S.C. 4801–4852). ECRA provides the legal basis for BIS's principal authorities and serves as the authority under which BIS issues this rule. Rulemaking Requirements1. Executive Orders 13563 and 12866 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has been determined to be not significant for purposes of Executive Order 12866. This rule is not an Executive Order 13771 regulatory action because this rule is not significant under Executive Order 12866. 2. Notwithstanding any other provision of law, no person is required to respond to or be subject to a penalty for failure to comply with a collection of information, subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number. This rule contains the following collections of information subject to the requirements of the PRA. These collections have been approved by OMB under control numbers 0694–0088 (Simplified Network Application Processing System) and 0694–0096 (Five Year Records Retention Period). The approved information collection under OMB control number 0694–0088 includes license applications, among other things, and carries a burden estimate of 29.6 minutes per manual or electronic submission for a total burden estimate of 31,833 hours. The approved information collection under OMB control number 0694–0096 includes recordkeeping requirements and carries a burden estimate of less than 1 minute per response for a total burden estimate of 248 hours. Specifically, BIS expects the burden hours associated with these collections would increase, slightly, by 76 hours and 5 minutes ( i.e., 150 applications × 30.6 minutes per response) for a total estimated cost increase of $2,280 ( i.e., 76 hours and 5 minutes × $30 per hour). The $30 per hour cost estimate for OMB control number 0694–0088 is consistent with the salary data for export compliance specialists currently available through glassdoor.com (glassdoor.com estimates that an export compliance specialist makes $55,280 annually, which computes to roughly $26.58 per hour). This increase is not expected to exceed the existing estimates currently associated with OMB control numbers 0694–0088 and 0694–0096. Any comments regarding the collection of information associated with this rule, Start Printed Page 83420 including suggestions for reducing the burden, may be sent to https://www.reginfo.gov/public/do/PRAMain. 3. This rule does not contain policies with Federalism implications as that term is defined in Executive Order 13132. 4. Pursuant to § 1762 of the Export Control Reform Act of 2018, this action is exempt from the Administrative Procedure Act (5 U.S.C. 553) requirements for notice of proposed rulemaking, opportunity for public participation, and delay in effective date. 5. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule by 5 U.S.C. 553, or by any other law, the analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., are not applicable. Accordingly, no regulatory flexibility analysis is required and none has been prepared. Start List of Subjects List of Subjects in 15 CFR Part 744
End List of Subjects Accordingly, part 744 of the Export Administration Regulations (15 CFR parts 730–774) is amended as follows: Start Part PART 744—[AMENDED]End Part Start Amendment Part 1. The authority citation for 15 CFR part 744 is revised to read as follows: End Amendment Part 50 U.S.C. 4801–4852; 50 U.S.C. 4601 et seq.;50 U.S.C. 1701 et seq.;22 U.S.C. 3201 et seq.;42 U.S.C. 2139a; 22 U.S.C. 7201 et seq.;22 U.S.C. 7210; E.O. 12058, 43 FR 20947, 3 CFR, 1978 Comp., p. 179; E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 608; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13099, 63 FR 45167, 3 CFR, 1998 Comp., p. 208; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; E.O. 13224, 66 FR 49079, 3 CFR, 2001 Comp., p. 786; Notice of September 18, 2020, 85 FR 59641 (September 22, 2020); Notice of November 12, 2020, 85 FR 72897 (November 13, 2020). |
