On Tuesday, the Commerce Department’s Bureau of Industry and Security (BIS) announced additions to its Entity List, enacting further export controls via the Export Administration Regulations (EAR). This move is largely aimed at limiting China’s artificial intelligence (AI) and advanced computing capabilities. The new additions include around 80 entities from the following countries: China (53), Pakistan (19), the United Arab Emirates (UAE) (4), South Africa (3), Iran (2), and Taiwan (1). BIS also modified 4 entities from France, Iran, Senegal, and the UK, respectively, who were already included in the Entity List.

BIS released 2 unpublished Federal Register notices detailing the additions and modifications to its Entity List, many of which are subsidiaries of companies previously restricted. This action by the Commerce Department was undertaken to promote U.S. national security and foreign policy as designated entities are considered to be acting contrary to American interests.

The BIS Entity List ensures that designated entities are unable to import restricted items unless exporters receive a special license to do so.

Notably, the 1^st Federal Register notice states that 12 entities—11 in China and 1 in Taiwan—added to the BIS list have also received Footnote 4 designations so they can be further restricted via foreign-direct product rules (FDPR), ensuring that controlled U.S. exports and technologies cannot be re-exported or sold in other countries to these entities.

Among the BIS additions to its Entity List is Inspur, a prominent tech and computer company headquartered in China. While Inspur Group had already been added to the BIS Entity List, loopholes allowed 6 of its subsidiaries to “directly contribute to Inspur’s development of supercomputers for military end use.” For this reason, these 6 Inspur subsidiary entities—5 in China and 1 in Taiwan—are now included in the Entity List with a Footnote 4 designation.

The Federal Register notices on the new final rules are scheduled for publication on Friday.

The 1^st Federal Register notice may be found here and the 2^nd here, both of which are the unpublished versions.

In response, Commerce Secretary Howard Lutnick commented in an accompanied press release, saying, “Under the strong leadership of President Donald Trump, the Commerce Department is taking decisive action to protect America. We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives.” Lutnick continued by affirming, “We are committed to using every tool at the Department’s disposal to ensure our most advanced technologies stay out of the hands of those who seek to harm Americans. At the same time, we will continue to drive American innovation, ensuring that our nation’s economic strength remains unparalleled.”

Newly confirmed Under Secretary for Industry and Security Jeffrey Kessler echoed these sentiments, stating, “American technology should never be used against the American people. BIS is sending a clear, resounding message that the Trump administration will work tirelessly to safeguard our national security by preventing U.S. technologies and goods from being misused for high performance computing, hypersonic missiles, military aircraft training, and UAVs that threaten our national security.” Kessler emphasized the importance of the additions, noting, “The Entity List is one of many powerful tools at our disposal to identify and cut off foreign adversaries seeking to exploit American technology for malign purposes.”

In the BIS press release, the agency states that the purpose of the additions and modifications to its Entity List is to comply with the following objectives reproduced below:

• Restrict the Chinese Communist Party’s (CCP) ability to acquire and develop high-performance and exascale computing capabilities, as well as quantum technologies, for military applications;
• Impede China’s development of its hypersonic weapons program;
• Prevent entities associated with the Test Flying Academy of South Africa (TFASA) from using U.S. items to train Chinese military forces;
• Disrupt Iran’s procurement of unmanned aerial vehicles (UAVs) and related defense items; and
• Impair the development of unsafeguarded nuclear activities and ballistic missile program.

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