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Commerce Department Adds 77 Companies and Individuals to the Entity List, Many in China, and Issues Huawei FAQs

December 21, 2020, Covington Alert

On December 18, the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) released a Final Rule (“the Rule”), effective immediately, adding 77 entities to the BIS Entity List. The majority of these entities are in China, and include, among others, the Semiconductor Manufacturing International Corporation (“SMIC”) and the drone company SZ DJI Technology Co., Ltd. (“DJI”). The new additions also include entities in Bulgaria, France, Germany, Hong Kong, Italy, Malta, Pakistan, Russia, and the United Arab Emirates. Exports, reexports, and transfers (in-country) to the listed entities of any item subject to the Export Administration Regulations (“EAR”) now require prior BIS licensing, and BIS has instituted a policy of a presumption of denial of export license requests for most items to the listed entities.

Also on December 18, BIS posted new Frequently Asked Questions (“FAQs”) related to BIS’s prior designation on the Entity List of Huawei Technologies Co., Ltd. and many of its non-U.S. affiliates (collectively, “Huawei”). The publication of the FAQs had been long awaited, as they address questions related to the August 2020 expansion of the EAR’s foreign-produced direct product rule to cover a broader range of items exported, reexported, or transferred to Huawei.

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