AGENCY:

Bureau of Industry and Security, Commerce.

ACTION:

Final rule.

SUMMARY:

This final rule amends the Export Administration Regulations (EAR) by adding fourteen entities to the Entity List. These fourteen 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 fourteen entities will be listed on the Entity List under the destinations of Germany, Russia, and Switzerland. This rule also corrects six existing entries to the Entity List, one under the destination of Germany and the other five under the destination of China.

DATES:

This rule is effective March 4, 2021.

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, Email: ERC@bis.doc.gov.

SUPPLEMENTARY INFORMATION:

Background

The Entity List (15 CFR, Subchapter C, part 744, Supplement No. 4 of the Export Administration Regulations (EAR)) 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 EAR impose license requirements on and limit the availability of most license exceptions for exports, reexports, and transfers (in country) involving 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. The Bureau of Industry and Security (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 fourteen entities to the Entity List. The fourteen entities are located in Germany, Russia, and Switzerland.

The ERC reviewed and applied § 744.11(b) (Criteria for revising the Entity List) in making the determination to add these fourteen 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 fourteen entities described below, the ERC made the requisite determination based on the standard set forth in § 744.11(b).

The ERC determined to add the following thirteen entities: Chimmed Group; Chimconnect GmbH; Chimconnect AG; Pharmkontract GmbH; Femteco; Interlab; LabInvest; OOO Analit Products; OOO Intertech Instruments; Pharmcontract GC; Rau Farm; Regionsnab; and Riol-Chemie, to the Entity List based on their proliferation activities in support of Russia's weapons of mass destruction programs. Nine of these entities are located in Russia, three are located in Germany, and one is located in Switzerland. Pursuant to § 744.11 of the EAR, the ERC also determined to add the 27th Scientific Center of the Russian Ministry of Defense (a.k.a., 27th NTs) located in Russia to the Entity List. This entity is a Russian Government Ministry of Defense facility associated with Russia's chemical weapons activities.

Pursuant to § 744.11(b) of the EAR, the ERC determined that the conduct of these fourteen 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 involving the entities, will enhance BIS's ability to prevent items subject to the EAR from being used in activities contrary to the national security and foreign policy interests of the United States.

For the fourteen entities added to the Entity List in this final rule, BIS imposes a license requirement that applies to all items subject to the EAR. For the 27th Scientific Center of the Russian Ministry of Defense, BIS will review license applications under § 744.4(d) of the EAR, the review policy that applies to items subject to the EAR that are destined for certain chemical and biological weapons end-uses. With respect to the other thirteen entities located in Russia, Germany, and Switzerland, BIS will review license applications under § 744.4(d) of the EAR as well as the policies set forth in § 744.2(d) and § 744.3(d), which apply to items subject to the EAR that are destined for certain nuclear and missile technology end-uses, respectively.

With respect to all fourteen entities, the license requirements apply to any transaction in which items subject to the EAR are to be exported, reexported, or transferred (in country) involving any of the entities in which such entities act as purchaser, intermediate consignee, ultimate consignee, or end-user as described in § 748.5(c) through (f). In addition, no license exceptions are available for exports, reexports, or transfers (in-country) involving the entities being added to the Entity List in this rule.

The acronym “a.k.a.”, or 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 fourteen entities to the Entity List and includes, where appropriate, aliases:

Germany

• Chimconnect Gmbh;
• Pharmcontract Gmbh; and
• Riol-Chemie.

Russia

• 27th Scientific Center of the Russian Ministry of Defense;
• Chimmed Group;
• Femteco;
• Interlab;
• LabInvest;
• OOO Analit Products;
• OOO Intertech Instruments;
• Pharmcontract GC;
• Rau Farm; and\
• Regionsnab.

Switzerland

• Chimconnect AG.

Corrections to the Entity List

This final rule implements corrections to six existing entries on the Entity List. One correction is under the destination of Germany for the entity “Huawei OpenLab Munich,” and a second correction is under the destination of China for the entity “Huawei Cloud Hong Kong.” Both entities were added to the Entity List on August 20, 2020 (85 FR 51596), and their entries were modified on August 27, 2020 (85 FR 52898). A correction is needed in the Federal Register citation column for these two entities because of an error that occurred in the amendatory instruction in the August 27, 2020 rule. This rule corrects the Federal Register citation for each entity to conform to the Federal Register citations that appear in the August 20, 2020 and August 27, 2020 rules. The third correction is under the destination of China for the entity “China State Shipbuilding Corporation, Limited (CSSC) 750th Research Institute.” This entity was added to the EAR on December 18, 2020 (85 FR 83416). This rule corrects the entity's name so that it reads as “China State Shipbuilding Corporation, Limited (CSSC) 750th Test Center.” The fourth correction is under the destination of China for the entity “SMIC Hong Kong International Company Limited.” This entity was originally added to the EAR in the December 18, 2020 rule and placed under Hong Kong. As part of a December 22, 2020 rule (85 FR 83416), this entry was moved and placed under China. Due to publication-related timing constraints, the December 22, 2020 rule did not include the Federal Register citation for the December 18, 2020 rule. This rule corrects the Federal Register citation for this entry to insert the citation from the December 18, 2020 rule. The fifth correction is under the destination of China for the entity “Su Bin.” This entity was originally added to the EAR under the destination of Hong Kong on August 1, 2014 (79 FR 44680) and moved from Hong Kong to the destination of China on December 23, 2020 (85 FR 83765). A correction is needed in the Federal Register citation column for this entity because of an error that double printed the December 23, 2020 Federal Register citation. This rule corrects the Federal Register citation by deleting the second reference to the citation. The sixth correction is under the destination of China for the entity “Nanjing FiberHome Starrysky Communication Development -o.” This rule corrects the name of this entity by replacing the “Nanjing FiberHome Starrysky Communication Development -o.” with “Nanjing FiberHome Starrysky Communication Development Co.”

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 March 4, 2021, 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.

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 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.

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—

1. The authority citation for 15 CFR part 744 continues 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 18, 2020, 85 FR 59641 (September 22, 2020); Notice of November 12, 2020, 85 FR 72897 (November 13, 2020).

2. Amend Supplement No. 4 to part 744 by

a. Under CHINA, PEOPLE'S REPUBLIC OF revising the entities “Huawei Cloud Hong Kong”, Nanjing FiberHome Starrysky Communication Development -o,” “SMIC Hong Kong International Company Limited”, and “Su Bin”;

b. Under Germany:

i. Adding in alphabetical order the entity “Chimconnect GmbH”;

ii. Revising the entity “Huawei OpenLab Munich”; and

iii. Adding in alphabetical order the entities “Pharmcontract GmbH,” and “Riol-Chemie”:

c. Under RUSSIA, by adding in alphabetical order the entities “27th Scientific Center of the Russian Ministry of Defense,” “Chimmed Group,” “Femteco,” “Interlab,” “LabInvest,” “OOO Analit Products,” “OOO Intertech Instruments,” “Pharmcontract GC,” “Regionsnab,” and “Rau Farm”; and

d. Under SWITZERLAND, by adding in alphabetical order the entity “Chimconnect AG”.

The additions and revisions read as follows:

Supplement No. 4 to Part 744—Entity List