AGENCY:

Bureau of Industry and Security, Commerce.

ACTION:

Final rule.

SUMMARY:

In this rule, the Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) by adding sixty entities, under a total of sixty-one entries, to the Entity List. These sixty 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. These entities will be listed on the Entity List under the destinations of the People's Republic of China (China), France, Hong Kong, Indonesia, Malaysia, Oman, Pakistan, Russia, Switzerland and the United Arab Emirates (U.A.E.). This rule also revises five existing entries on the Entity list, one each under the destinations of Canada, Germany, Hong Kong, Iran, and the U.A.E.

DATES:

This rule is effective August 27, 2020.

FOR FURTHER INFORMATION CONTACT:

Chair, End-User Review Committee, Office of the Assistant Secretary, Export Administration, Bureau of Industry and Security, Department of Commerce, Phone: (202) 482-5991, Fax: (202) 482-3911, Email: ERC@bis.doc.gov.

SUPPLEMENTARY INFORMATION:

Background

The Entity List (Supplement No. 4 to part 744 of the Export Administration Regulations (EAR)) 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. The EAR (15 CFR parts 730-774) impose additional license requirements on, and limit 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 all decisions to remove or modify an entry by unanimous vote.

ERC Entity List Decisions

Additions to the Entity List

Under § 744.11(b) (Criteria for revising the Entity List) of the EAR, 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 that are contrary to the national security or foreign policy interests of the United States, and those acting on behalf of such entities, may be added to the Entity List. Paragraphs (b)(1) through (5) of § 744.11 provide an illustrative list of activities that could be considered contrary to the national security or foreign policy interests of the United States.

This rule implements the decision of the ERC to add sixty entities, under a total of sixty-one entries, to the Entity List; one of these entities is being added under two entries. These sixty entities will be listed on the Entity List under the destinations of, as applicable, China, France, Hong Kong, Indonesia, Malaysia, Oman, Pakistan, Russia, Switzerland, and the U.A.E. The ERC made the decision to add each of the sixty entities described below under the standard set forth in § 744.11(b) of the EAR.

The ERC determined to add Travcon Aviation Group and its employee Phillip Zurcher; Quantum Aviation and Supply SDN BHD and its employee Zulkefli bin Yusuf; Maxwell Prima-Ventures SDN BHD and its employee Mohd Zamri bin Mazleh; PT. Kuantum Tekno Kreatif and its employee Nur Rochman Achmad; Kish Motor Jahan Technic; and Hejaif Alhadeetha Trading Company, under the destinations, as applicable, of France, Indonesia, Malaysia, Oman, and Switzerland, because the ERC has reasonable cause to believe they were instrumental in the attempted diversion of controlled U.S.-origin aircraft parts to Iran, in violation of the Iranian Transactions and Sanctions Regulations and the EAR.

The ERC determined to add KK International Traders (KKIT); Sayyed Brothers Engineering Co. (SBEC); and QTech under the destination of Pakistan, because of their contributions to unsafeguarded nuclear activities. The ERC also determined to add Blue Chip International and Sci-Tech Global under the destination of Pakistan, as well as Sci Box Scientific and Laboratory Equipment Trading, LLC under the destination of the U.A.E., because of their contributions to unsafeguarded nuclear activities.

The ERC determined to add MTech Industrial Limited because it has contributed to unsafeguarded nuclear activities and missile proliferation activities. The ERC determined to add Taihe Electric (Hong Kong) Limited under the destinations of China and Hong Kong because it has contributed to unsafeguarded nuclear activities.

The ERC determined to add PNPI Group SDN BHD; Sam Johnson; John Tan; HAT Logistics SDN BHD; Donny Lee; and Sky Marine and Oil SDN BHD under the destination of Malaysia, because there is reasonable cause to believe that these entities were involved in a scheme to falsify information submitted in support of BIS license applications in order to divert U.S.-origin items to Iran without the required U.S. Government authorization.

The ERC determined to add Peaceful Vision (Lianyungang) Electronic Co., Ltd.; and Shanghai Fengjin Electronic Technology Co., Ltd. under the destination of China and to add Peaceful Vision Co., Ltd under the destination of Hong Kong, because there is reasonable cause to believe that there is an unacceptable risk that U.S.-origin items exported, reexported, or transferred (in-country) to these entities will be used in military end-use activities in China.

The ERC has determined to add 33rd Scientific Research and Testing Institute; 48th Central Scientific Research Institute, Kirov; 48th Central Scientific Research Institute, Sergiev Posad; 48th Central Scientific Research Institute, Yekaterinburg; and State Scientific Research Institute of Organic Chemistry and Technology under the destination of Russia, based on their involvement with the Russian military. Specifically, the ERC has reasonable cause to believe that 33rd Scientific Research and Testing Institute is a Ministry of Defense facility associated with the Russian chemical program and chemical weapons testing range, and that State Scientific Research Institute of Organic Chemistry and Technology is a Russian Ministry of Defense facility associated with the Russian chemical weapons program. The ERC also has reasonable cause to believe that 48th Central Scientific Research Institute, Kirov; 48th Central Scientific Research Institute, Sergiev Posad; and 48th Central Scientific Research Institute, Yekaterinburg are Ministry of Defense facilities associated with the Russian biological weapons program.

The ERC determined to add Xi'an Overland Science and Technology Co., Ltd. under the destination of China, because the ERC has obtained evidence of its acquisition and attempted acquisition of U.S.-origin items for a person on the Entity List and in support of programs for the People's Liberation Army.

The ERC determined to add Raneen Wireless Development Systems Company (RWDS, LLC); Sky Gulf Electronic Devices Industries; and the associated individual Ali Al-Dhaheri to the Entity List under the destination of the U.A.E. for engaging in activities contrary to U.S. national security or foreign policy interests. Specifically, the ERC has reasonable cause to believe that Raneen Wireless Development Systems Company (RWDS, LLC) and Sky Gulf Electronic Devices Industries are affiliates of AdCom Systems, which was added to the Entity List as of March 21, 2016 (81 FR 14958), and were established by Al-Dhaheri following AdCom Systems' listing in order to continue proliferation activities that are contrary to U.S. national security and foreign policy interests.

The ERC determined to add China Communications Construction Company Dredging Group Co. Ltd.; China Communications Construction Company Guangzhou Waterway Bureau; China Communications Construction Company Second Navigation Engineering Bureau; China Communications Construction Company Shanghai Waterway Bureau; and China Communications Construction Company Tianjin Waterway Bureau to the Entity List under the destination of China for engaging in activities contrary to U.S. national security interests. Specifically, the ERC has taken account of evidence that these entities enabled China to reclaim and militarize disputed outposts in the South China Sea. In particular, these entities have engaged in reclaiming land at Mischief Reef, which per a July 12, 2016 ruling by an Arbitral Tribunal convened under the 1982 Law of the Sea Convention was determined to be part of the Philippines' exclusive economic zone and continental shelf.

The ERC also determined to add Beijing Huanjia Telecommunication Co., Ltd.; Changzhou Guoguang Data Communications Co., Ltd.; China Electronics Technology Group Corporation, 7th Research Institute (CETC-7); China Electronics Technology Group Corporation, 30th Research Institute (CETC-30); China Shipbuilding Group 722nd Research Institute; Chongxin Bada Technology Development Co., Ltd.; Guangzhou Guangyou Communications Equipment Co., Ltd.; Guangzhou Haige Communication Group Co., Ltd.; Guangzhou Hongyu Technology Co., Ltd. (a subordinate institute of CETC-7); Guangzhou Tongguang Communication Technology Co., Ltd. (a subordinate institute of CETC-7); Guilin Changhai Development Co., Ltd.; Hubei Guangxing Communications Technology Co., Ltd.; Shaanxi Changling Electronic Technology Co., Ltd.; Shanghai Cable Offshore Engineering Co., Ltd.; Telixin Electronics Technology Co., Ltd.; Tianjin 764 Avionics Technology Co., Ltd.; Tianjin 764 Communication and Navigation Technology Co., Ltd.; Tianjin Broadcasting Equipment Co., Ltd.; and Wuhan Mailite Communication Co., Ltd. to the Entity List for engaging in activities contrary to U.S. national security interests. Specifically, these entities similarly have been involved in the PRC's land reclamation efforts in the South China Sea.

Pursuant to § 744.11(b), the ERC determined that the conduct of the above-described sixty entities raises sufficient concerns that prior review, via the imposition of a license requirement, of exports, reexports, or transfers (in-country) of all items subject to the EAR involving these entities, and the possible issuance of license denials or the possible imposition of license conditions on shipments to these entities, will enhance BIS's ability to prevent violations of the EAR or otherwise protect U.S. national security or foreign policy interests.

For the sixty entities added to the Entity List in this final rule, BIS imposes a license requirement that applies to all items subject to the EAR. In addition, no license exceptions are available for exports, reexports, or transfers (in-country) to the persons being added to the Entity List in this rule.

For eight of the sixty entities—Blue Chip International; KK International Traders (KKIT); MTech Industrial Limited; QTech; Sayyed Brothers Engineering Co. (SBEC); Sci-Tech Global; Sci Box Scientific and Laboratory Equipment Trading, LLC; and Taihe Electric (Hong Kong) Limited—BIS imposes the license review policy set forth in § 744.2(d) of the EAR (for license applications for certain nuclear end uses).

For HAT Logistics SDN BHD, the license review policy imposed by BIS is case-by-case review.

For the other fifty-one entities added to the Entity List by this rule, BIS imposes a license review policy of a presumption of denial.

The acronym “a.k.a.” (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.

For the reasons described above, this final rule adds the following sixty entities, under a total of sixty-one entries, to the Entity List:

China

• Beijing Huanjia Telecommunication Co., Ltd.;
• Changzhou Guoguang Data Communications Co., Ltd.;
• China Communications Construction Company Dredging Group Co. Ltd.;
• China Communications Construction Company Guangzhou Waterway Bureau;
• China Communications Construction Company Second Navigation Engineering Bureau;
• China Communications Construction Company Shanghai Waterway Bureau;
• China Communications Construction Company Tianjin Waterway Bureau;
• China Electronics Technology Group Corporation, 7th Research Institute (CETC-7);
• China Electronics Technology Group Corporation, 30th Research Institute (CETC-30);
• China Shipbuilding Group 722nd Research Institute;
• Chongxin Bada Technology Development Co., Ltd.;
• Guangzhou Guangyou Communications Equipment Co., Ltd.;
• Guangzhou Haige Communication Group Co., Ltd.;
• Guangzhou Hongyu Technology Co., Ltd. (a subordinate institute of CETC-7);
• Guangzhou Tongguang Communication Technology Co., Ltd. (a subordinate institute of CETC-7);
• Guilin Changhai Development Co., Ltd.;
• Hubei Guangxing Communications Technology Co., Ltd.;
• MTech Industrial Limited;
• Peaceful Vision (Lianyungang) Electronic Co., Ltd.;
• Shanghai Fengjin Electronic Technology Co., Ltd.;
• Shaanxi Changling Electronic Technology Co., Ltd.;
• Shanghai Cable Offshore Engineering Co., Ltd.;
• Taihe Electric (Hong Kong) Limited;
• Telixin Electronics Technology Co., Ltd.;
• Tianjin 764 Avionics Technology Co., Ltd.;
• Tianjin 764 Communication and Navigation Technology Co., Ltd.;
• Tianjin Broadcasting Equipment Co., Ltd.;
• Wuhan Mailite Communication Co., Ltd.; and
• Xi'an Overland Science and Technology Co., Ltd.

France

• Kish Motor Jahan Technic.

Hong Kong

• Peaceful Vision Co., Ltd.; and
• Taihe Electric (Hong Kong) Limited.

Indonesia

• PT. Kuantum Tekno Kreatif.

Malaysia

• Donny Lee;
• HAT Logistics SDN BHD;
• John Tan;
• Maxwell Prima-Ventures SDN BHD;
• Mohd Zamri bin Mazleh;
• Nur Rochman Achmad;
• PNPI Group SDN BHD;
• Quantum Aviation and Supply SDN BHD;
• Sam Johnson;
• Sky Marine and Oil SDN BHD; and
• Zulkefli bin Yusuf.

Oman

• Hejaif Alhadeetha Trading Company.

Pakistan

• Blue Chip International;
• KK International Traders (KKIT);
• QTech;
• Sayyed Brothers Engineering Co. (SBEC); and
• Sci-Tech Global.

Russia

• 33rd Scientific Research and Testing Institute;
• 48th Central Scientific Research Institute, Kirov;
• 48th Central Scientific Research Institute, Sergiev Posad;
• 48th Central Scientific Research Institute, Yekaterinburg; and
• State Scientific Research Institute of Organic Chemistry and Technology.

Switzerland

• Phillip Zurcher; and
• Travcon Aviation Group.

United Arab Emirates

• Ali Al-Dhaheri;
• Raneen Wireless Development Systems Company (RWDS, LLC);
• Sci Box Scientific and Laboratory Equipment Trading, LLC; and
• Sky Gulf Electronic Devices Industries.

Revisions to the Entity List

This final rule revises five existing entries, under each of the destinations of Canada, Germany, Hong Kong, Iran and the U.A.E., as follows:

This rule implements a revision to three existing entries for Saeed Talebi, first added to the Entity List under the destinations of Canada, Iran, and the U.A.E. on December 12, 2013 (78 FR 75463). BIS is revising the existing entries under Canada, Iran, and the U.A.E. by removing one of the two aliases. Specifically, BIS is revising the existing entries to modify the three entries for Saeed Talebi to remove the alias “Al” from the three entries.

Corrections to the Entity List

This rule also implements a correction to one existing entry for Huawei OpenLab Munich, first added to the Entity List under the destination of Germany, on August 17, 2020 in a final rule published on August 20 2020 (85 FR 51596), and a correction to one existing entry for Huawei Cloud Hong Kong, also first added to the Entity List in the same final rule. BIS is revising the License review policy column for both of these entries, so it correctly reads presumption of denial for consistency with description of the license review policy that was included in the Background section of the August 20 rule that specified the license review policy was presumption of denial for all thirty-eight entities added to the Entity List.

Savings Clause

Shipments of items removed from eligibility for a License Exception or 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 August 27, 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) (codified, as amended, at 50 U.S.C. Sections 4801-4852). ECRA provides the legal basis for BIS's principal authorities and serves as the authority under which BIS issues this rule.

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 nor 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 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 online at https://www.reginfo.gov/​public/​do/​PRAMain.

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

4. Pursuant to section 1762 of the Export Control Reform Act of 2018 (50 U.S.C. 4801-4852), 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 revised 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.; 22 U.S.C. 3201 et seq.; 42 U.S.C. 2139a; 22 U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 12058, 43 FR 20947, 3 CFR, 1978 Comp., p. 179; E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 608; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13099, 63 FR 45167, 3 CFR, 1998 Comp., p. 208; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; E.O. 13224, 66 FR 49079, 3 CFR, 2001 Comp., p. 786; Notice of September 19, 2019, 84 FR 49633, 3 CFR, 2019 Comp., p. 468; Notice of November 12, 2019, 84 FR 61817, 3 CFR, 2019 Comp., p. 479.

2. Supplement No. 4 to part 744 is amended:

a. By revising the Canada entity “Saeed Talebi”;

b. By adding, in alphabetical order, the China, People's Republic Of entities “Beijing Huanjia Telecommunication Co., Ltd.,” “Changzhou Guoguang Data Communications Co., Ltd.,” “China Communications Construction Company Dredging Group Co. Ltd.,” “China Communications Construction Company Guangzhou Waterway Bureau,” “China Communications Construction Company Second Navigation Engineering Bureau,” “China Communications Construction Company Shanghai Waterway Bureau,” “China Communications Construction Company Tianjin Waterway Bureau,” “China Electronics Technology Group Corporation, 7th Research Institute (CETC-7),” “China Electronics Technology Group Corporation, 30th Research Institute (CETC-30),” “China Shipbuilding Group 722nd Research Institute,” “Chongxin Bada Technology Development Co., Ltd.,” “Guangzhou Guangyou Communications Equipment Co., Ltd.,” “Guangzhou Haige Communication Group Co., Ltd.,” “Guangzhou Hongyu Technology Co., Ltd. (a subordinate institute of CETC-7),” “Guangzhou Tongguang Communication Technology Co., Ltd. (a subordinate institute of CETC-7),” “Guilin Changhai Development Co., Ltd.,” “Hubei Guangxing Communications Technology Co., Ltd.,” “MTech Industrial Limited,” “Peaceful Vision (Lianyungang) Electronic Co., Ltd.,” “Shaanxi Changling Electronic Technology Co., Ltd.,” “Shanghai Cable Offshore Engineering Co., Ltd.,” “Shanghai Fengjin Electronic Technology Co., Ltd.,” “Taihe Electric (Hong Kong) Limited,” “Telixin Electronics Technology Co., Ltd.,” “Tianjin 764 Avionics Technology Co., Ltd.,” “Tianjin 764 Communication and Navigation Technology Co., Ltd.,” “Tianjin Broadcasting Equipment Co., Ltd.,” “Wuhan Mailite Communication Co., Ltd.,” and “Xi'an Overland Science and Technology Co., Ltd.”;

c. By adding, in alphabetical order, the France entity “Kish Motor Jahan Technic”;

d. By revising the German entity “Huawei OpenLab Munich”;

e. Under HONG KONG:

i. By revising the entity “Huawei Cloud Hong Kong”; and

ii. By adding, in alphabetical order, the entities “Peaceful Vision Co., Ltd.” and “Taihe Electric (Hong Kong) Limited”;

f. By adding, in alphabetical order, the Indonesia entity “PT. Kuantum Tekno Kreatif”;

g. By revising the Iran entity “Saeed Talebi”;

h. By adding in alphabetical order, the Malaysia entities “Donny Lee,” “HAT Logistics SDN BHD,” “John Tan,” “Maxwell Prima-Ventures SDN BHD,” “Mohd Zamri bin Mazleh,” “Nur Rochman Achmad,” “PNPI Group SDN BHD,” “Quantum Aviation and Supply SDN BHD,” “Sam Johnson,” “Sky Marine and Oil SDN BHD,” and “Zulkefli bin Yusuf”;

i. By adding, in alphabetical order, the Oman entity “Hejaif Alhadeetha Trading Company”;

j. By adding in alphabetical order, the Pakistan entities “Blue Chip International,” “KK International Traders (KKIT),” “QTech,” “Sayyed Brothers Engineering Co. (SBEC),” and “Sci-Tech Global”;

k. By adding, in alphabetical order, the Russia entities “33rd Scientific Research and Testing Institute,” “48th Central Scientific Research Institute, Kirov,” “48th Central Scientific Research Institute, Sergiev Posad,” “48th Central Scientific Research Institute, Yekaterinburg,” and “State Scientific Research Institute of Organic Chemistry and Technology”;

l. By adding, in alphabetical order, the Switzerland entities “Phillip Zurcher” and “Travcon Aviation Group”; and

m. Under UNITED ARAB EMIRATES:

i. By adding, in alphabetical order, the entities “Ali Al-Dhaheri” and “Raneen Wireless Development Systems Company (RWDS, LLC)”;

ii. By revising the entity, “Saeed Talebi”; and

iii. By adding, in alphabetical order, the entities “Sci Box Scientific and Laboratory Equipment Trading, LLC” and “Sky Gulf Electronic Devices Industries”.

The additions and revisions read as follows:

Supplement No. 4 to Part 744—Entity List