What once was a little-known enforcement mechanism of the US Department of Commerce, Bureau of Industry and Security (BIS), the Entity List is now being pushed into the spotlight of the so-called Trade War. In a special filing late Monday, BIS issued a Final Rule published and effective on October 9, 2019.
This final rule adds 28 entities to the Entity List, all of which are from the People’s Republic of China. The majority of the entities are regional and municipal government entities, seemingly in response to the humanitarian crisis involving the Uighur people in China. However, importantly, BIS listed major video surveillance manufacturer Hikvision and other technology companies.1 Those entities include Chinese companies in the video surveillance, artificial intelligence, voice recognition, deep learning and other technology fields.
The Entity List does not impose an embargo on these companies, but imposes export license requirements on the export of all items that are “subject to the EAR” to such persons, unless otherwise specified in the target company’s listing on the Entity List. In this case, BIS has included a policy of "case-by-case review" for certain items, which is more liberal than the usual policy of "presumption of denial" for all other items in this listing. License exceptions are unavailable for exports, reexports or transfers to these entities.
To understand whether these prohibitions apply to your company, detailed analyses are required of whether the company’s goods, software or technology are “subject to the EAR” (see our previous client alert here) and the export control classification number (ECCN) of such items. DLA Piper is experienced in these analyses and can also assist in obtaining an export license if necessary. For more information, you may contact Richard Newcomb, Thomas M. deButts or Tom Reynolds.
1 Dahua Technology; IFLYTEK; Megvii Technology; Sense Time; Xiamen Meiya Pico Information Co. Ltd.; Yitu Technologies; and Yixin Science and Technology Co. Ltd.