Additions and Modifications to the Entity List; Removals From the Validated End-User (VEU) Program

<RULE> DEPARTMENT OF COMMERCE <SUBAGY>Bureau of Industry and Security</SUBAGY> <CFR>15 CFR Parts 744 and 748</CFR> <DEPDOC>[Docket No. 241126-0303]</DEPDOC> <RIN>RIN 0694-AJ77</RIN> <SUBJECT>Additions and Modifications to the Entity List; Removals From the Validated End-User (VEU) Program</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Bureau of Industry and Security, Commerce. <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> In this final rule, the Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) by adding 140 entities to the Entity List. These entries are listed on the Entity List under the destinations of China, People's Republic of (China), Japan, South Korea, and Singapore and have been determined by the U.S. Government to be acting contrary to the national security and foreign policy interests of the United States. This final rule also modifies 14 existing entries on the Entity List, consisting of revisions to 14 entries under China. This final rule publishes concurrently with BIS's interim final rule, “Foreign-Produced Direct Product Rule Additions, and Refinements to Controls for Advanced Computing and Semiconductor Manufacturing Items” (0694-AJ74), which makes additional changes to the EAR controls on advanced computing items and semiconductor manufacturing items. This final rule is part of this larger effort to ensure that appropriate EAR controls are in place on these items, including in connection with transactions destined to or otherwise involving the entities being added to the Entity List, as well as for existing entries on the Entity List that are being modified. All of these entities (those newly added and those being modified) are involved with the development and production of “advanced-node integrated circuits” (“advanced-node ICs”) and/or semiconductor manufacturing items, and/or have supported the Chinese government's Military-Civil Fusion (MCF) Development Strategy. Additionally, this final rule designates nine of these entities being added and seven of the entries being modified as entities for which entity-specific restrictions involving foreign-produced items apply. This final rule also amends the EAR by removing three entities from the Validated End-User (VEU) Program. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> <E T="03">Effective date:</E> This rule is effective December 2, 2024. <E T="03">Compliance date:</E> The changes being made in this final rule that pertain to Entity List license requirements and other Entity List-related requirements linked to Footnote 5 designations have a compliance date of December 31, 2024. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> For questions on the Entity List and VEU Program changes in this final rule, contact Chair, End-User Review Committee, Office of the Assistant Secretary for Export Administration, Bureau of Industry and Security, Department of Commerce, Phone: (202) 482-5991, Email: <E T="03">ERC@bis.doc.gov.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Background</HD> <HD SOURCE="HD2">A. Entity List and End-User Review Committee (ERC)</HD> The Entity List (supplement no. 4 to part 744 of the EAR (15 CFR parts 730 through 774)) 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, pursuant to § 744.11(b). The EAR imposes additional license requirements on, and limit the availability of, most license exceptions for exports, reexports, and transfers (in-country) when an entity listed on the Entity List is a party to the transaction. 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 <E T="04">Federal Register</E> document that added the entity to the Entity List. BIS places entities on the Entity List pursuant to parts 744 (Control Policy: End-User and End-Use Based) and 746 (Embargoes and Other Special Controls) of the EAR. The 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 makes all decisions to remove or modify an entry by unanimous vote. <HD SOURCE="HD2">B. Addressing National Security and Foreign Policy Concerns Involving Advanced Computing and Semiconductor Manufacturing Items</HD> This final rule is published concurrently with the interim final rule, “Foreign-Produced Direct Product Rule Additions, and Refinements to Controls for Advanced Computing and Semiconductor Manufacturing Items” (0694-AJ74) (FDP IFR), which makes additional changes to the EAR controls on advanced computing items or semiconductor manufacturing items, including new Foreign Direct Product (FDP) rules for certain commodities to impair the capability of certain destinations or entities of concern to produce “advanced-node ICs.” This final rule is part of the larger effort reflected in the FDP IFR to ensure appropriate EAR controls are in place on advanced computing items and semiconductor manufacturing items, including in connection with the entities being added to the Entity List, as well as for existing Entity List entries that are being modified. All of these entities, both those being added and those whose entries are being modified, are involved with the development and production of these “advanced-node ICs” and/or semiconductor manufacturing items, and/or have supported the Chinese government's MCF Development Strategy, activities that have been determined to be contrary to U.S. national security and foreign policy interests. The FDP IFR also adds one new FDP rule to § 734.9 (Foreign-Direct Product Rules) that will be set forth in paragraph (e)(3) (Entity List FDP rule: Footnote 5). BIS has designated nine of the 140 entities being added to the Entity List in this rule with a Footnote 5, which extends the Entity List license requirements to foreign direct products subject to the EAR on the basis of § 734.9(e)(3). Foreign-made items specified in certain ECCNs that are destined to an entity with a Footnote 5 designation may also be subject to the EAR on the basis of the <E T="03">de minimis</E> provision described in § 734.4(a)(9). Entities designated with a Footnote 5 designation have been determined by the ERC to be involved in, or risk becoming involved in, the development or production of “advance-node ICs” that would otherwise require a license under § 744.23(a)(2). Section 744.23(a)(2) imposes a license requirement for any item subject to the EAR when you know the items will be used in the “development” or “production” of ICs destined to a “facility” located in Macau or a destination specified in Country Group D:5 where “production” of “advanced-node ICs” occurs. <HD SOURCE="HD1">II. Entity List Decisions</HD> <HD SOURCE="HD2">A. Additions to the Entity List</HD> The ERC determined to add the following 106 entities to the Entity List: ACM Research (Shanghai); Beijing E-Town Semiconductor Technology Co., Ltd.; Beijing Guowei Integration Technology Co., Ltd.; Beijing Huada Jiutian Technology Co., Ltd.; Beijing Kaishitong Semiconductor Co., Ltd.; Beijing Naura Microelectronics Equipment Co., Ltd.; Beijing Naura Semiconductor Equipment Co., Ltd.; Beijing Sevenstar Flowmeter Co., Ltd.; Beijing Sevenstar Integrated Circuit Equipment Co., Ltd.; Beijing Shuoke Zhongkexin Electronic Equipment Co., Ltd.; Beijing Skyverse Technology Co., Ltd.; Beijing Zhongke Xin Electronic Equipment; Changsha Zhichun Application Technology Co., Ltd.; Chengdu Huada Jiutianke Technology Co., Ltd.; Chengdu Skyverse Technology Co., Ltd.; Guangzhou Huada Jiutian Technology Co., Ltd.; Guangzhou Skyverse Technology Co., Ltd.; Guowei Group (Shenzhen) Co., Ltd.; Hefei Kaishitong Semiconductor Co., Ltd.; Hefei Naura Microelectronics Equipment Co., Ltd.; Hefei Zhihui Semiconductor Application Technology Co., Ltd.; Hefei Zhiwei Microelectronics Co., Ltd.; Hefei Zhiwei Semiconductor Co., Ltd.; Hwa Tsing (Beijing) Technology Co., Ltd.; Hwa Tsing (Guangzhou) Semiconductor Co., Ltd.; Hwa Tsing (Shanghai) Semiconductor Co., Ltd.; Hwa Tsing Technology Co., Ltd.; Jiangsu Nata Optoelectronic Material Co., Ltd.; Jiangsu Qiwei Semiconductor Equipment Co., Ltd.; Jiangsu Zhichun System Integration Co., Ltd.; Kingstone Technology Hong Kong Limited; Nanda Optoelectronic Semiconductor Materials Co., Ltd.; Nanjing Huada Jiutianke Technology Co., Ltd.; Naura Technology Group Co., Ltd.; Ningbo Nanda Optoelectronic Materials Ltd.; Piotech; Piotech (Beijing) Co., Ltd.; Piotech (Shanghai) Co., Ltd.; Piotech Chuangyi (Shenyang) Semiconductor Equipment Co., Ltd.; Piotech Jianke (Haining) Semiconductor Equipment Co., Ltd.; Qingxin Technology Co., Ltd.; Quanjiao Nanda Optoelectronic Materials Ltd.; Raintree Scientific Instruments (Shanghai) Corporation; Ruili Microelectronics Equipment (Shanghai) Co., Ltd.; Shandong Feiyuan Gas Co., Ltd.; Shanghai AGM Gas Co., Ltd.; Shanghai Aipusi Precision Equipment Co., Ltd.; Shanghai Huada Jiutian Information Technology Co., Ltd.; Shanghai Jingce Semiconductor Technology Co., Ltd.; Shanghai Jingzhuo Information Technology Co., Ltd.; Shanghai Kaishitong Semiconductor Co., Ltd.; Shanghai Lingang Kaishitong Semiconductor Co., Ltd.; Shanghai Lizhi Technology Co., Ltd.; Shanghai Modern Advanced Ultra-Precision Manufacturing Center Co., Ltd.; Shanghai Nanpre Mechanics Co., Ltd.; ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 148k characters. 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