Effective October 30, 2018, the Department of Commerce has taken action to restrict exports to Fujian Jinhua Integrated Circuit Company, Ltd. (Jinhua) by adding them to the Entity List (Supplement No. 4 to Part 744 of the Export Administration Regulations (EAR)), because Jinhua poses a significant risk of becoming involved in activities that are contrary to the national security interests of the United States.
Jinhua is nearing completion of substantial production capacity for dynamic random access memory (DRAM) integrated circuits. The additional production, in light of the likely U.S.-origin technology, threatens the long term economic viability of U.S. suppliers of these essential components of U.S. military systems.
“When a foreign company engages in activity contrary to our national security interests, we will take strong action to protect our national security. Placing Jinhua on the Entity List will limit its ability to threaten the supply chain for essential components in our military systems,” Secretary of Commerce Ross said.
Pursuant to Section 744.11(b) of the EAR, the Entity List 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 imposes additional license requirements on, and limits the availability of most license exceptions for, exports, re-exports, and transfers (in-country) to listed entities.
As a result of adding Jinhua to the Entity List, a license is required for all exports, re-exports, and transfers of commodities, software and technology subject to the EAR to Jinhua. Such license applications will be reviewed with a presumption of denial.