On March 25, 2025, the Department of Commerce’s Bureau of Industry and Security (BIS) added over 80 companies to its Entity List through two Final Rules. These are the first listings by BIS under President Donald Trump’s second term and the listings heavily focus on China. According to BIS, these 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.” In a press release, BIS noted that the objectives for these listings are to:
- Restrict the Chinese Communist Party’s (CCP) ability to acquire and develop high-performance and exascale computing capabilities, as well as quantum technologies, for military applications;
- Impede China’s development of its hypersonic weapons program;
- Prevent entities associated with the Test Flying Academy of South Africa (TFASA) from using U.S. items to train Chinese military forces;
- Disrupt Iran’s procurement of unmanned aerial vehicles (UAVs) and related defense items; and
- Impair the development of unsafeguarded nuclear activities and the ballistic missile program in Pakistan.
In the first Final Rule, BIS added 12 companies under the destinations of China (11) and Taiwan (1). These entities are being added to the Entity List due to: (i) acquiring or attempting to acquire U.S.-origin items in support of China’s military modernization; (ii) acquiring or attempting to acquire U.S.-origin items in support of supercomputer projects for the Chinese government and/or military; or, (iii) involvement in the development of Chinese exascale supercomputers. Each of these entities will also be subject to restrictions on foreign-produced items made with U.S. technology. For all of these entities, a license is now required from BIS for all items subject to the Export Administration Regulations (EAR). License applications will be reviewed under either a presumption of denial or outright policy of denial. This rule was effective on March 25, 2025.
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 this regulatory action that were en route aboard a carrier to a port of export, reexport, or transfer (in-country), on March 25, 2025, may proceed to that destination until April 24, 2025. However, any such items not actually exported, reexported or transferred (in-country) before midnight, on April 24, 2025, require a license in accordance with this Final Rule.
In the second Final Rule, BIS added 70 companies under the destinations of China (42); Iran (2); Pakistan (19); South Africa (3); and the United Arab Emirates (UAE) (4). These entities are being added to the Entity List due to: (i) their contributions to Pakistan’s unsafeguarded nuclear activities; (ii) their contributions to Pakistan’s unsafeguarded nuclear activities; (iii) acquiring or attempting to acquire U.S.-origin items in support of advancing China’s quantum technology capabilities; (iv) links to or attempts to sell products to companies either on or that supply Entity List parties; (v) acquiring or attempting to acquire U.S.-origin items in support of China’s military modernization; or (vi) attempts to circumvent export controls and sanctions to divert U.S.-origin technology and equipment to Iran. For all of these entities, a license is now required from BIS for all items subject to the Export Administration Regulations (EAR). License applications will be reviewed under a presumption of denial. This Final Rule is effective on March 28, 2025.
For the changes being made in this second 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 this regulatory action that were en route aboard a carrier to a port of export, reexport, or transfer (in-country), on March 28, 2025, may proceed to that destination until April 27, 2025. However, any such items not actually exported, reexported or transferred (in-country) before midnight, on April 27, 2025, require a license in accordance with this Final Rule.