Additions to the Entity List

<RULE> DEPARTMENT OF COMMERCE <SUBAGY>Bureau of Industry and Security</SUBAGY> <CFR>15 CFR Part 744</CFR> <DEPDOC>[Docket No. 250106-0001]</DEPDOC> <RIN>RIN 0694-AK01</RIN> <SUBJECT>Additions to the Entity List</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Bureau of Industry and Security, Department of Commerce. <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> In this rule, the Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) by adding 16 entities to the Entity List, under the destinations of China, People's Republic of (China) (14) and Singapore (2). 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. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> This rule is effective January 16, 2025. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> 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">Background</HD> The Entity List (supplement no. 4 to part 744 of the EAR (15 CFR parts 730-774)) 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 limits the availability of, most license exceptions for exports, reexports, and transfers (in-country) when a listed entity is a party to the transaction. The license review policy for each listing 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 listing to the Entity List. BIS amends 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 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 makes all decisions to remove or modify an entry by unanimous vote. <HD SOURCE="HD1">Entity List Decisions</HD> <HD SOURCE="HD2">Additions to the Entity List</HD> The ERC approved the addition of Chengdu Suanfeng Technology Co., Ltd.; Fujian Sophon Technology Co., Ltd.; Fujian Suanxin Technology Co., Ltd.; Jiangsu Suanxin Technology Co., Ltd.; Qingdao Sophgo Technology Co., Ltd.; Quliang Electronics Co., Ltd.; Shanghai Suanhu Technology Co., Ltd.; Sophgo Technologies Ltd.; Sophon Technology (Beijing) Co., Ltd.; Suanli (Fujian) Technology Co., Ltd.; Tianjin Shunhua Technology Co., Ltd.; Wuhan Sophgo Technology Co., Ltd.; Wuxi Sophgo Technology Co., Ltd.; and Xiamen Sophgo Technologies Limited under the destination of China; and Sophgo Technologies Pte. Ltd. and PowerAir Pte. Ltd. under the destination of Singapore to the Entity List. These entities are being added to the Entity List due to their involvement in supporting or directly contributing to the development of advanced computing integrated circuits (ICs) that further China's development of advanced weapons systems, weapons of mass destruction, and high-tech surveillance applications, and because these entities supply Chinese public security end users and pose a risk of diversion to Huawei, an entity on the Entity List. This activity is contrary to the national security and foreign policy interests of the United States under § 744.11 of the EAR. These entities will be added to the Entity List with a footnote 4 designation for their role in supporting or directly contributing to the development of advanced computing ICs that further China's development of advanced weapons systems, weapons of mass destruction, and high-tech surveillance applications. For all of these entities, BIS imposes a license requirement for all items subject to the EAR, and a license review policy of a presumption of denial. The footnote 4 designation means that “items subject to the EAR,” for the purpose of the license requirements for these entries, includes foreign-produced items that are subject to the EAR pursuant to § 734.9(e)(2) of the EAR. For the reasons described above, this final rule adds the following 16 entities, including aliases where appropriate, to the Entity List: <HD SOURCE="HD1">China</HD> • Chengdu Suanze Technology Co., Ltd., • Fujian Sophon Technology Co., Ltd., • Fujian Suanxin Technology Co., Ltd., • Jiangsu Suanxin Technology Co., Ltd., • Qingdao Sophgo Technology Co., Ltd., • Quliang Electronics Co., Ltd., • Shanghai Suanhu Technology Co., Ltd., • Sophgo Technologies Ltd., • Sophon Technology (Beijing) Co., Ltd., • Suanli (Fujian) Technology Co., Ltd., • Tianjin Shunhua Technology Co., Ltd., • Wuhan Suanneng Technology Co., Ltd., • Wuxi Suanneng Technology Co., Ltd., <E T="03">and</E> • Xiamen Sophgo Technologies Limited. <HD SOURCE="HD1">Singapore</HD> • Sophgo Technologies Pte. Ltd., <E T="03">and</E> • PowerAir Pte. Ltd. <HD SOURCE="HD1">Savings Clause</HD> 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 January 16, 2025, pursuant to actual orders for export, reexport, or transfer (in-country) to or within a foreign destination, 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 February 18, 2025. Any such items not actually exported, reexported or transferred (in-country) before midnight, on February 18, 2025, require a license in accordance with this final rule. <HD SOURCE="HD1">Export Control Reform Act of 2018</HD> On 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. In particular, Section 1753 of ECRA (50 U.S.C. 4812) authorizes the regulation of exports, reexports, and transfers (in-country) of items subject to U.S. jurisdiction. Further, Section 1754(a)(1)-(16) of ECRA (50 U.S.C. 4813(a)(1)-(16)) authorizes, inter alia, establishing and maintaining a list of foreign persons and end-uses that are determined to be a threat to the national security and foreign policy of the United States pursuant to the policy set forth in Section 1752(2)(A), and restricting exports, reexports, and in-country transfers of any controlled items to any foreign person or end-use so listed; apprising the public of changes in policy, regulations, and procedures, and any other action necessary to carry out ECRA that is not otherwise prohibited by law. Pursuant to Section 1762(a) of ECRA (50 U.S.C. 4821(a)), these changes can be imposed in a final rule without prior notice and comment. <HD SOURCE="HD1">Rulemaking Requirements</HD> 1. This rule has been determined to be not significant for purposes of 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 (PRA) (44 U.S.C. 3501 <E T="03">et seq.</E> ), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number. This regulation involves an information collection approved by OMB under control number 0694-0088, Simplified Network Application Processing System. BIS does not anticipate a change to the burden hours associated with this collection as a result of this rule. Information regarding the collection, including all supporting materials, can be accessed at: <E T="03">https://www.reginfo.gov/public/do/PRAMain.</E> 3. This rule does not contain policies with federalism implications as that term is defined in Executive Order 13132. 4. Pursuant to Section 1762 of ECRA (50 U.S.C. 4821), this action is exempt from the Administrative Procedure Act (APA) (5 U.S.C. 553) requirements for notice of proposed rulemaking, opportunity for public participation, and delay in effective date. While Section 1762 of ECRA provides sufficient authority for such an exemption, this action is also independently exempt from these APA requirements because it involves a military or foreign affairs function of the United States (5 U.S.C. 553(a)(1)). 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 <E T="03">et seq.</E> ) are not applicable. Accordingly, no regulatory flexibility analysis is required, and none has been prepared. <LSTSUB> <HD SOURCE="HED">List of Subjects in 15 CFR Part 744</HD> Exports, Reporting and recordkeeping requirements, Terrorism. </LSTSUB> Accordingly, part 744 ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 22k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━