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. 250324-0047]</DEPDOC> <RIN>RIN 0694-AK08</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 12 entities to the Entity List, under the destinations of China, People's Republic of (China) (11) and Taiwan (1). 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 March 25, 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> <HD SOURCE="HD2">The Entity List</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 determined to add the Beijing Academy of Artificial Intelligence and Beijing Innovation Wisdom Technology Co., Ltd. to the Entity List, under the destination of China. These entities are being added for acquiring and attempting to acquire U.S.-origin items in support of China's military modernization. Specifically, these entities have developed large artificial intelligence (AI) models and advanced computing chips for defense purposes. This activity is contrary to U.S. national security and foreign policy interests under § 744.11 of the EAR. For both 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. They are also given a footnote 4 designation, which means that “items subject to the EAR” for the purpose of these license requirements include foreign-produced items that are subject to the EAR pursuant to § 734.9(e)(2) of the EAR. The ERC determined to add six entities to the Entity List: Inspur (Beijing) Electronic Information Industry Co., Ltd.; Inspur Electronic Information Industry Co., Ltd.; Inspur Electronic Information (Hong Kong) Co., Ltd.; Inspur (HK) Electronics Co., Ltd.; and Inspur Software Co., Ltd., under the destination of China; and Inspur Taiwan, under the destination of Taiwan. These six entities are subsidiaries of China's leading cloud computing and big data service provider, Inspur Group, which was added to the Entity List on March 2, 2023. <E T="03">See</E> Additions and Revisions of Entities to the Entity List, 88 FR 13673, March 6, 2023. These entities are being added for their contributions to Inspur's development of supercomputers for military end use, particularly by acquiring or attempting to acquire U.S.-origin items in support of supercomputer projects for the Chinese government and/or military. This activity is contrary to U.S. national security and foreign policy interests pursuant to § 744.11 of the EAR. For these entities, BIS imposes a license requirement for all items subject to the EAR, and license applications will be reviewed under policy of denial. These six subsidiaries directly contribute to Inspur's development of supercomputers for military end use and are added to the Entity List with a Footnote 4 designation. A footnote 4 designation means that “items subject to the EAR” for the purpose of these license requirements include foreign-produced items that are subject to the EAR pursuant to § 734.9(e)(2) of the EAR. The ERC determined to add Henan Dingxin Information Industry Co., Ltd.; Nettrix Information Industry Co., Ltd.; Suma Technology Co., Ltd.; and Suma-USI Electronics Co., Ltd., under the destination of China, to the Entity List. These entities are being added for their involvement in the development of Chinese exascale supercomputers, which are capable of processing vast amounts of data at very high speeds and conducting large-scale simulations. Furthermore, these entities have provided significant manufacturing capabilities to Sugon, a Chinese high-performance computing server manufacturer added to the Entity List in 2019 for building supercomputers used by military end users and supporting China's destabilizing military modernization efforts. <E T="03">See</E> Addition of Entities to the Entity List and Revision of an Entry on the Entity List, 84 FR 29371, June 24, 2019. The advancement of such computing technology in support of Chinese military end users and China's military modernization efforts is contrary to the national security and foreign policy interests of the United States, pursuant to § 744.11. Due to their involvement in Chinese exascale supercomputer development, these parties are added to the Entity List with a footnote 4 designation. For these four entities, BIS imposes a license requirement for all items subject to the EAR and license applications will be reviewed under policy of denial. The footnote 4 designation means that “items subject to the EAR” for the purpose of these license requirements include 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 12 entities, including aliases where appropriate, to the Entity List: <HD SOURCE="HD3">China</HD> • Beijing Academy of Artificial Intelligence; • Beijing Innovation Wisdom Technology Co., Ltd.; • Henan Dingxin Information Industry Co., Ltd.; • Inspur (Beijing) Electronic Information Industry Co., Ltd.; • Inspur Electronic Information Industry Co., Ltd.; • Inspur Electronic Information (Hong Kong) Co., Ltd.; • Inspur (HK) Electronics Co., Ltd.; • Inspur Software Co., Ltd.; • Nettrix Information Industry Co., Ltd.; • Suma Techology Co., Ltd.; and • Suma-USI Electronics Co., Ltd. <HD SOURCE="HD3">Taiwan</HD> • Inspur Taiwan. <HD SOURCE="HD2">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 March 25, 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 April 24, 2025. 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. <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< ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 29k characters. 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