The Department of Commerce’s Bureau of Industry and Security (BIS) has determined that five Chinese companies are acting contrary to the national security or foreign policy interests of the United States and thus pose a significant risk. In a Federal Register notice, BIS announced that it has placed the following companies on the Entity List:
- Chengdu Haiguang Integrated Circuit, including two aliases (Hygon and Chengdu Haiguang Jincheng Dianlu Sheji);
- Chengdu Haiguang Microelectronics Technology, including two aliases (HMC and Chengdu Haiguang Wei Dianzi Jishu);
- Higon, including five aliases (Higon Information Technology, Haiguang Xinxi Jishu Youxian Gongsi, THATIC, Tianjing Haiguang Advanced Technology Investment and Tianjing Haiguang Xianjin Jishu Touzi Youxian Gongsi);
- Sugon, including nine aliases (Dawning, Dawning Information Industry, Sugon Information Industry, Shuguang, Shuguang Information Industry, Zhongke Dawn, Zhongke Shuguang, Dawning Company and Tianjin Shuguang Computer Industry); and
- Wuxi Jiangnan Institute of Computing Technology, including two aliases (Jiangnan Institute of Computing Technology and JICT).
The BIS determination was based, in part, on these entities’ involvement in China’s development of “exascale high performance computing.” Sugon has publicly acknowledged a variety of military end uses and end users of its high performance computers. Sugon is also the majority owner of Higon, which has ownership interests in Chengdu Haiguang Integrated Circuit and Chengdu Haiguang Microelectronics Technology. Wuxi Jiangnan Institute of Computing Technology is owned by the 56th Research Institute of the General Staff of China’s People’s Liberation Army, and its mission is to support China’s military modernization.
With these entities’ placement on the Entity List, BIS has now imposed a license requirement on them for all exports, reexports and transfers (in-country) subject to the Export Administration Regulations (EAR), with a license review policy of presumption of denial. In addition, no license exceptions are available for exports, reexports or transfers (in-country) to these Chinese entities. While this rule is effective as of June 24, 2019, shipments on board a carrier to a port of export on June 24 may be exported under any previous eligibility under the EAR.