AGENCY:

Bureau of Industry and Security, Commerce

ACTION:

Final rule.

SUMMARY:

This final rule amends the Export Administration Regulations (EAR) by adding nine entities to the Entity List. These nine entities have been determined by the U.S. Government to be acting contrary to the foreign policy interests of the United States and will be listed on the Entity List under the destination of the People's Republic of China (China). This rule also modifies two entries and revises one entry on the Entity List under the destination of China.

DATES:

This rule is effective June 5, 2020.

FOR FURTHER INFORMATION CONTACT:

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: ERC@bis.doc.gov.

SUPPLEMENTARY INFORMATION:

Background

The Entity List (15 CFR, Subchapter C, part 744, Supplement No. 4) identifies entities reasonably believed to be involved, or to pose a significant risk of being or becoming involved, in activities contrary to the national security or foreign policy interests of the United States. The Export Administration Regulations (EAR) (15 CFR parts 730-774) impose additional license requirements on, and limits the availability of most license exceptions for, exports, reexports, and transfers (in country) to listed entities. The license review policy for each listed entity 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 Federal Register notice adding entities to the Entity List. BIS places entities on the Entity List pursuant to part 744 (Control Policy: End-User and End-Use Based) and part 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.

ERC Entity List Decisions

Additions to the Entity List

This rule implements the decision of the ERC to add nine entities to the Entity List. The nine entities are added based on § 744.11 (License requirements that apply to entities acting contrary to the national security or foreign policy interests of the United States) of the EAR. The nine entities are located in China.

The ERC reviewed and applied § 744.11(b) (Criteria for revising the Entity List) in making the determination to add these nine entities to the Entity List. Under that paragraph, persons for whom there is reasonable cause to believe, based on specific and articulable facts, that they have been involved, are involved, or pose a significant risk of being or becoming involved in activities that are contrary to the national security or foreign policy interests of the United States, along with those acting on behalf of such persons, may be added to the Entity List. Paragraphs (b)(1) through (b)(5) of § 744.11 provide an illustrative list of activities that could be contrary to the national security or foreign policy interests of the United States. For each of the nine entities described below, the ERC made the requisite determination under the standard set forth in § 744.11(b).

Pursuant to § 744.11(b) of the EAR, the ERC determined that the Ministry of Public Security's Institute of Forensic Science of China and Aksu Huafu Textiles Co. are engaging in activities contrary to the foreign policy interests of the United States, and seven additional entities, CloudWalk Technology; FiberHome Technologies Group and its subsidiary Nanjing FiberHome Starrysky Communication Development Co.; NetPosa and its subsidiary SenseNets; Intellifusion; and IS'Vision are enabling activities contrary to the foreign policy interests of the United States. Specifically, these entities have been implicated in human rights violations and abuses in the implementation of China's campaign of repression, mass arbitrary detention, forced labor and high-technology surveillance against Uighurs, Kazakhs, and other members of Muslim minority groups in the Xinjiang Uighur Autonomous Region (XUAR).

Pursuant to § 744.11(b) of the EAR, the ERC has determined that the conduct of these nine entities raises sufficient concern that prior review of exports, reexports or transfers (in-country) of all items subject to the EAR involving these entities, and the possible imposition of license conditions or license denials on shipments to the entities, will enhance BIS's ability to prevent items subject to the EAR from being used in activities contrary to the foreign policy of the United States.

For the nine entities described above that are being added to the Entity List, BIS imposes a license requirement for all items subject to the EAR and a license review policy of case-by-case review for Export Control Classification Numbers (ECCNs) 1A004.c, 1A004.d, 1A995, 1A999.a, 1D003, 2A983, 2D983, and 2E983. A policy of case-by-case review also applies to items designated as EAR99 that are described in the Note to ECCN 1A995, specifically, items for protection against chemical or biological agents that are consumer goods, packaged for retail sale or personal use, or medical products. BIS has adopted a license review policy of presumption of denial for all other items subject to the EAR. For all nine entities, the license requirements apply to any transaction in which items are to be exported, reexported, or transferred (in country) to any of the entities or in which such entities act as purchaser, intermediate consignee, ultimate consignee, or end user. In addition, no license exceptions are available for exports, reexports, or transfers (in-country) to the entities being added to the Entity List in this rule. The acronym “a.k.a.,” which is an abbreviation of `also known as' is used in entries on the Entity List to identify aliases, thereby assisting exporters, reexporters and transferors in identifying entities on the Entity List.

This final rule adds the following nine entities to the Entity List and includes, where appropriate, aliases:

People's Republic of China

• Aksu Huafu Textiles Co., including two aliases (Akesu Huafu and Aksu Huafu Dyed Melange Yarn);
• CloudWalk Technology, including four aliases (Chongqing Cloudwalk Technology Co., Ltd.; Guangzhou Yunshang Information Technology Co., Ltd.; Yun Cong Information Technology Co. Ltd.; and Yun Cong Technology);
• FiberHome Technologies Group, including eight aliases (FiberHome; FiberHome International Technology Co., Ltd., FiberHome Networks; FiberHome Networks Co. Ltd.; FiberHome Telecommunication Technologies Co., Ltd.; Haohuo Xiangyun Network Technology Co., Ltd.; Wuhan Fiberhome International; and Wuhan Institute of Posts and Telecommunications);
• Intellifusion, including two aliases (Shenzhen Yuntian Lifei Technology Co., Ltd. and Yuntian Lifei);
• IS'Vision, including six aliases (Chengdu Yinchen Netcom Technology Co., Ltd; Isvision Tech; Isvision Technologies Co., Ltd.; Shanghai Is'vision Co.; Shanghai Isvision Technologies Co., Ltd.; and Yinchen Technology);
• Ministry of Public Security's Institute of Forensic Science of China, including two aliases (Forensic Identification Center of the Ministry of Public Security of the People's Republic of China and Material Identification Center of the Ministry of Public Security of the People's Republic of China);
• Nanjing FiberHome Starrysky Communication Development Co., including two aliases (Fiberhome StarrySky Co., Ltd. and Nanjing Fenghuo Xingkong Communication Development);
• NetPosa, including three aliases (Dongfang Netpower Technology Co.; Dongfang Wangli Technology; and NetPosa Technologies Ltd.);
• SenseNets, including six aliases (Deep Net Vision; Deep Network Vision; Sensenets Corporation; Shenzhen Net Vision; Shenzhen Shenwang Vision Technology Co., Ltd.; and Shenzhen Vision).

Revisions to the Entity List

This final rule implements revisions to three existing entries on the Entity List; the three entities were added to the Entity List under the destination of China on October 9, 2019 (84 FR 54004). BIS is modifying the existing entry for Hikvision by adding an additional name “Hangzhou Hikvision Digital Technology Co., Ltd” and identifying “Hikvision” as an alias. BIS is modifying the existing entry for Sensetime by adding an additional name “Beijing Sensetime Technology Development Co., Ltd”, an additional alias “Beijing Shangtang Technology Development Co., Ltd.” and identifying “SenseTime” as an alias in the revised entry. BIS is revising the existing entry for Kezilesu Kyrgyz Autonomous Prefecture Public Security Bureau to correct the spelling of the first word of the existing alias so it correctly reads as “Kizilsu Autonomous Prefecture Public Security Bureau.”

Savings Clause

Shipments of items removed from eligibility for a License Exception or for export or reexport without a license (NLR) as a result of this regulatory action that were en route aboard a carrier to a port of export or reexport, on June 5, 2020, pursuant to actual orders for export or reexport to a foreign destination, may proceed to that destination under the previous eligibility for a License Exception or export or reexport without a license (NLR).

Export Control Reform Act of 2018

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. As set forth in Section 1768 of ECRA, all delegations, rules, regulations, orders, determinations, licenses, or other forms of administrative action that were made, issued, conducted, or allowed to become effective under the Export Administration Act of 1979 (50 U.S.C. 4601 et seq.) (as in effect on August 12, 2018, and as continued in effect pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.)) or under the Export Administration Regulations, and were in effect as of August 13, 2018, shall continue in effect according to their terms until modified, superseded, set aside, or revoked under the authority of ECRA.

Rulemaking Requirements

1. Executive Orders 13563 and 12866 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has been determined to be not significant for purposes of Executive Order 12866. This rule is not an Executive Order 13771 regulatory action because this rule is not significant under 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 (44 U.S.C. 3501 et seq.) (PRA), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number. This regulation involves collections previously approved by OMB under control number 0694-0088, Simplified Network Application Processing System, which includes, among other things, license applications, and carries a burden estimate of 42.5.8 minutes for a manual or electronic submission. Total burden hours associated with the PRA and OMB control number 0694-0088 are not expected to increase as a result of this rule. You may send comments regarding the collection of information associated with this rule, including suggestions for reducing the burden, to Jasmeet K. Seehra, Office of Management and Budget (OMB), by email to Jasmeet_K._Seehra@omb.eop.gov, or by fax to (202) 395-7285.

3. This rule does not contain policies with Federalism implications as that term is defined in Executive Order 13132.

4. Pursuant to § 1762 of the Export Control Reform Act of 2018, this action is exempt from the Administrative Procedure Act (5 U.S.C. 553) requirements for notice of proposed rulemaking, opportunity for public participation, and delay in effective date.

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, et seq., are not applicable. Accordingly, no regulatory flexibility analysis is required and none has been prepared.

List of Subjects in 15 CFR Part 744

• Exports
• Reporting and recordkeeping requirements
• Terrorism

Accordingly, part 744 of the Export Administration Regulations (15 CFR parts 730-774) is amended as follows:

PART 744—[AMENDED]

1. The authority citation for 15 CFR part 744 is amended to read as follows:

Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50 U.S.C. 1701 et seq.; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 13020, 61 FR 54079, 3 CFR, 1996 Comp., p. 219; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; E.O. 13637, 78 FR 16129, 3 CFR, 2014 Comp., p. 223; Notice of November 12, 2019, 84 FR 61817 (November 13, 2019).

2. Supplement No. 4 to part 744 is amended under CHINA, PEOPLE'S REPUBLIC OF,

a. By adding in alphabetical order entries for “Aksu Huafu Textiles Co.”, “Beijing Sensetime Technology Development Co., Ltd.”, “CloudWalk Technology”, “FiberHome Technologies Group” and “Hangzhou Hikvision Digital Technology Co., Ltd.”;

b. By removing “Hikvision”;

c. By adding in alphabetical order entries for “Intellifusion” and “IS'Vision”;

d. By revising “Kezilesu Kyrgyz Autonomous Prefecture Public Security Bureau”; and

e. By adding in alphabetical order entries for “Ministry of Public Security's Institute of Forensic Science of China”, “Nanjing FiberHome Starrysky Communication Development Co.” and “NetPosa”;

f. By removing “Sense Time”; and

g. By adding in alphabetical order “SenseNets”.

The additions and revision read as follows:

Supplement No. 4 to Part 744—Entity List