On October 17, 2023, the Department of Commerce’s Bureau of Industry and Security (BIS) issued a Final Rule adding two Chinese entities and their subsidiaries (a total of 13 entities) to the Entity List due to their involvement in the development of advanced computing chips and having been found to be engaged in activities contrary to U.S. national security and foreign policy interests. According to BIS, these entities are involved in the development of advanced computing integrated circuits (ICs) that can be used to provide artificial intelligence capabilities to further development of weapons of mass destruction, advanced weapons systems and high-tech surveillance applications that create national security concerns.

For all 13 entities, BIS has imposed a license requirement for all items subject to the Export Administration Regulations (EAR), which will be reviewed under a presumption of denial. These entities will also be subject to restrictions on foreign-produced items made with U.S. technology. The Entity List specifies the license requirements that BIS imposes on each listed entity. Such license requirements are independent of, and in addition to, license requirements imposed elsewhere in the EAR.

For the changes being made in this Final Rule, shipments of items removed from eligibility for a License Exception or export, reexport or transfer (in-country) without a license (NLR) as a result of these Entity List designations that were en route aboard a carrier to a port of export, reexport or transfer (in-country), on October 17, 2023, pursuant to actual orders, may proceed to that destination under the previous eligibility for a License Exception or export, reexport, or transfer (in-country) without a license (NLR) before November 16, 2023. Any such items not actually exported, reexported or transferred (in-country) before midnight on October 17, 2023, will require a license from BIS.