In an announcement of a final rule published in the federal register on November 26, the Bureau of Industry and Security at the U.S. Commerce Department said it would add 12 Chinese companies to its "Entity List," which means that sales to these companies will now be subject to specific license requirements.
As explained in the document, "[t]he Entity List ... 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." Decisions on additions are made by the End-User Review Committee (ERC), which is composed of representatives of the Departments of Commerce (Chair), State, Defense, Energy and, where appropriate, Treasury.
Here, the ERC decided to add three affiliates of Corad Technology Limited which "have been involved in sales of technology from the United States and other Western nations to Iran’s military and space programs, Democratic People’s Republic of Korea (North Korea) front companies, and Chinese government and defense industry subordinate entities."
The ERC also added Hangzhou Zhongke Microelectronics Co., Ltd., Hunan Goke Microelectronics, New H3C Semiconductor Technologies Co., Ltd., Xi’an Aerospace Huaxun Technology, and Yunchip Microelectronics, all located in China, "for their support of the military modernization of the People’s Liberation Army."
It added Hefei National Laboratory for Physical Sciences at Microscale, QuantumCTek Co., and Shanghai QuantumCTeck Co., Ltd. "for acquiring and attempting to acquire U.S.-origin items in support of military applications."
It added Shaanxi Zhi En Electromechanical Technology Co., Ltd. based on its "contributions to Pakistan’s unsafeguarded nuclear activities."
And it added Poly Asia Pacific Ltd. (PAPL) and Peaktek Company Ltd. based on "contributions to Pakistan’s unsafeguarded nuclear activities."
The Commerce Department's announcement notes the importance of concerns relating to the quantum computing sector:
Eight technology entities based in the PRC are being added to the list as part of the Department of Commerce’s efforts to prevent U.S. emerging technologies from being used for the PRC’s quantum computing efforts that support military applications, such as counter-stealth and counter-submarine applications, and the ability to break encryption or develop unbreakable encryption. These PRC-based technology entities support the military modernization of the People’s Liberation Army and/or acquire and attempt to acquire U.S. origin-items in support of military applications. ...