Document ID: BIS-2019-0015-0001
Agency: bis
Document Type: Rule
Title: Addition of Entities to the Entity List and Revision of an Entry on the Entity List
Posted Date: 2019-06-24T04:00Z

[Federal Register Volume 84, Number 121 (Monday, June 24, 2019)]
[Rules and Regulations]
[Pages 29371-29375]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-13245]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 744

[Docket No. 190503424-9424-01]
RIN 0694-AH83

Addition of Entities to the Entity List and Revision of an Entry 
on the Entity List

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

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SUMMARY: In this rule, the Bureau of Industry and Security (BIS) amends 
the Export Administration Regulations (EAR) by adding five entities to 
the Entity List. These five 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 destination of China. This rule also modifies 
one entry on the Entity List under the destination of China.

DATES: This rule is effective June 24, 2019.

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, 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, subchapter C, parts 730-774) imposes additional license 
requirements on, and limits 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.

[[Page 29372]]

ERC Entity List Decision

Additions to the Entity List

    Under Sec.  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, 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 persons, may 
be added to the Entity List.
    Pursuant to Sec.  744.11(b) of the EAR, the ERC determined that 
Chinese entities Sugon and the Wuxi Jiangnan Institute of Computing 
Technology are involved in activities determined to be contrary to the 
national security and foreign policy interests of the United States. 
Sugon also is, as further described below, the majority owner of Higon, 
and Higon has ownership interests in Chengdu Haiguang Integrated 
Circuit and Chengdu Haiguang Microelectronics Technology. Accordingly, 
the ERC has also determined that Higon, Chengdu Haiguang Integrated 
Circuit, and Chengdu Haiguang Microelectronics Technology pose a 
significant risk of being or becoming involved in activities contrary 
to the national security and foreign policy interests of the United 
States.
    Sugon, the Wuxi Jiangnan Institute of Computing Technology, and the 
National University of Defense Technology (NUDT) are the three entities 
leading China's development of exascale high performance computing. 
Sugon has publicly acknowledged a variety of military end uses and end 
users of its high-performance computers. Wuxi Jiangnan Institute of 
Computing Technology is owned by the 56th Research Institute of the 
General Staff of China's People's Liberation Army. Its mission is to 
support China's military modernization. NUDT was added to the Entity 
List in February 2015, because of its use of U.S-origin multicores, 
boards, and (co)processors to power supercomputers believed to support 
nuclear explosive simulation and military simulation activities. Since 
then, NUDT has procured items under the name Hunan Guofang Kei 
University using four separate, additional addresses not already listed 
on the Entity List.
    Sugon is the majority owner of Higon, as noted above. Higon's 
business activities include integrated circuits, electronic information 
systems, software development, and computer system integration. Chengdu 
Haiguang Integrated Circuit is majority owned by Higon, and designs X86 
architecture computer chips for network information servers. Chengdu 
Haiguang Microelectronics Technology is engaged in integrated circuit 
production (including design and/or manufacturing) and has a 
substantial ownership share by Higon through a second joint venture.
    The ERC determined that the activities of Sugon, the Wuxi Jiangan 
Institute of Computing Technology, the NUDT under its alias Hunan 
Guofang Kei University, as well as Sugon's majority ownership of Higon 
and Higon's ownership interests in Chengdu Haiguang Integrated Circuit 
and Chengdu Haiguang Microelectronics Technology, raise sufficient 
concern that prior review of exports, reexports, or transfers (in-
country) of items subject to the EAR involving these entities, and the 
possible imposition of license conditions or license denials on 
shipments to these entities, will enhance BIS's ability to prevent 
activities contrary to the national security and foreign policy 
interests of the United States.
    For the five entities added to the Entity List in this final rule, 
BIS imposes a license requirement for all items subject to the EAR and 
a license review policy of presumption of denial. In addition, no 
license exceptions are available for exports, reexports, or transfers 
(in-country) to the persons being added to the Entity List by this 
rule. 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.
    This final rule adds the following five entities to the Entity List 
in China:
     Chengdu Haiguang Integrated Circuit, including two aliases 
(Hygon and Chengdu Haiguang Jincheng Dianlu Sheji);
     Chengdu Haiguang Microelectronics Technology, including 
two aliases (HMC and Chengdu Haiguang Wei Dianzi Jishu);
     Higon, including five aliases (Higon Information 
Technology, Haiguang Xinxi Jishu Youxian Gongsi, THATIC, Tianjing 
Haiguang Advanced Technology Investment, and Tianjing Haiguang Xianjin 
Jishu Touzi Youxian Gongsi);
     Sugon, including nine aliases (Dawning, Dawning 
Information Industry, Sugon Information Industry, Shuguang, Shuguang 
Information Industry, Zhongke Dawn, Zhongke Shuguang, Dawning Company, 
and Tianjin Shuguang Computer Industry);
     Wuxi Jiangnan Institute of Computing Technology, including 
two aliases (Jiangnan Institute of Computing Technology and JICT).

Modification to the Entity List

    This final rule implements the decision of the ERC to modify one 
existing entry, NUDT, which was added to the Entity List under the 
destination of China on February 18, 2015 (80 FR 8527). BIS is 
modifying the existing entry National University of Defense Technology 
(NUDT) to add one alias (Hunan Guofang Keji University) and four 
locations.

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 June 24, 2019, 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), which provides the legal basis for BIS's principal authorities 
and serves as the authority under which BIS issues this rule. As set 
forth in sec. 1768 of ECRA, all delegations, rules, regulations, 
orders, determinations, licenses, or other forms of administrative 
action that have been made, issued, conducted, or allowed to become 
effective under the Export Administration Act of 1979 (50 U.S.C. 4601 
et seq.) (as in effect prior to August 13, 2018 and as continued in 
effect pursuant to the International Emergency Economic Powers Act (50 
U.S.C. 1701 et seq.) and Executive Order 13222 of August 17, 2001, 3 
CFR, 2001 Comp., p. 783 (2002), as amended by Executive Order 13637 of 
March 8, 2013, 78 FR 16129 (March 13, 2013), and as extended by the 
Notice of August 8, 2018, 83 FR 39871 (August 13, 2018)), or the Export 
Administration Regulations, and were in effect as of August 13, 2018, 
shall continue in effect according to their terms until modified, 
superseded, set aside, or revoked under the authority of ECRA.

[[Page 29373]]

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 by fax to (202) 395-7285.
    3. This rule does not contain policies with Federalism implications 
as that term is defined in Executive Order 13132.
    4. Pursuant to sec. 1762 of the Export Control Reform Act of 2018 
(Title XVII, Subtitle B of Pub. L. 115-232), which was included in the 
John S. McCain National Defense Authorization Act for Fiscal Year 2019, 
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]

0
1. The authority citation for 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. 12947, 
60 FR 5079, 3 CFR, 1995 Comp., p. 356; 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 August 8, 
2018, 83 FR 39871 (August 13, 2018); Notice of September 19, 2018, 
83 FR 47799 (September 20, 2018); Notice of November 8, 2018, 83 FR 
56253 (November 9, 2018); Notice of January 16, 2019, 84 FR 127 
(January 18, 2019).

0
2. Supplement No. 4 to part 744 is amended:
0
a. under CHINA, PEOPLE'S REPUBLIC OF, by adding in alphabetical order, 
five Chinese entities, ``Chengdu Haiguang Integrated Circuit,'' 
``Chengdu Haiguang Microelectronics Technology,'' ``Higon,'' ``Sugon,'' 
and ``Wuxi Jiangnan Institute of Computing Technology'';
0
b. under CHINA, PEOPLE'S REPUBLIC OF, by revising the entry ``National 
University of Defense Technology (NUDT)''.
    The additions and revisions read as follows:

Supplement No. 4 to Part 744--Entity List

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                                                                              License review    Federal Register
        Country                     Entity             License requirement        policy            citation
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                                                  * * * * * * *
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CHINA, PEOPLE'S                                                 * * * * * *
 REPUBLIC OF.
                         Chengdu Haiguang Integrated   For all items        Presumption of     84 FR [INSERT FR
                          Circuit, a.k.a., the          subject to the       denial.            PAGE NUMBER], 6/
                          following two aliases:        EAR. (See Sec.                          24/19.
                         --Hygon; and                   744.11 of the
                         --Chengdu Haiguang Jincheng    EAR).
                          Dianlu Sheji.
                         China (Sichuan) Free Trade
                          Zone, No. 22-31, 11th
                          Floor, E5, Tianfu Software
                          Park, No. 1366, Middle
                          Section of Tianfu Avenue,
                          Chengdu High-tech Zone,
                          Chengdu, China.
                         Chengdu Haiguang              For all items        Presumption of     84 FR [INSERT FR
                          Microelectronics              subject to the       denial.            PAGE NUMBER], 6/
                          Technology, a.k.a., the       EAR. (See Sec.                          24/19.
                          following two aliases:        744.11 of the
                         --HMC; and                     EAR).
                         --Chengdu Haiguang Wei
                          Dianzi Jishu.

[[Page 29374]]

 
                         China (Sichuan) Free Trade
                          Zone, No. 23-32, 12th
                          Floor, E5, Tianfu Software
                          Park, No. 1366, Middle
                          Section of Tianfu Avenue,
                          Chengdu High-tech Zone,
                          Chengdu, China.
                                                                * * * * * *
                         Higon, a.k.a., the following  For all items        Presumption of     84 FR [INSERT FR
                          five aliases:                 subject to the       denial.            PAGE NUMBER], 6/
                         --Higon Information            EAR. (See Sec.                          24/19.
                          Technology;                   744.11 of the
                         --Haiguang Xinxi Jishu         EAR).
                          Youxian Gongsi;
                         --THATIC;
                         --Tianjing Haiguang Advanced
                          Technology Investment; and
                         --Tianjing Haiguang Xianjin
                          Jishu Touzi Youxian Gongsi.
                         Industrial Incubation-3-8,
                          North 2-204, 18 Haitai West
                          Road, Huayuan Industrial
                          Zone, Tianjin, China.
                                                                * * * * * *
                         National University of        For all items        Presumption of     80 FR 8527, 2/18/
                          Defense Technology (NUDT),    subject to the       denial.            15. 84 FR
                          a.k.a., the following one     EAR. (See Sec.                          [INSERT FR PAGE
                          alias:                        744.11 of the                           NUMBER], 6/24/
                         --Hunan Guofang Keji           EAR).                                   19.
                          University.
                         Garden Road (Metro West),
                          Changsha City, Kaifu
                          District, Hunan Province,
                          China; and 109 Deya Road,
                          Kaifu District, Changsha
                          City, Hunan Province,
                          China, and 47 Deya Road,
                          Kaifu District, Changsha
                          City, Hunan Province,
                          China, and 147 Deya Road,
                          Kaifu District, Changsha
                          City, Hunan Province,
                          China, and 47 Yanwachi,
                          Kaifu District, Changsha,
                          Hunan, China.
                                                                * * * * * *
                         Sugon, a.k.a., the following  For all items        Presumption of     84 FR [INSERT FR
                          nine aliases:                 subject to the       denial.            PAGE NUMBER], 6/
                         --Dawning;                     EAR. (See Sec.                          24/19.
                         --Dawning Information          744.11 of the
                          Industry;                     EAR).
                         --Sugon Information
                          Industry;
                         --Shuguang;
                         --Shuguang Information
                          Industry;
                         --Zhongke Dawn;
                         --Zhongke Shuguang;
                         --Dawning Company; and
                         --Tianjin Shuguang Computer
                          Industry.
                         Sugon Building, No. 36
                          Zhongguancun Software Park,
                          No. 8 Dongbeiwang West
                          Road, Haidian District,
                          Beijing; and No. 15, Haitai
                          Huake Street, Huayuan
                          Industrial Zone, Tianjin;
                          and Sugon Science and
                          Technology Park, No. 64
                          Shuimo West Street, Haidian
                          District, Beijing, China.
                                                                * * * * * *
                         Wuxi Jiangnan Institute of    For all items        Presumption of     84 FR [INSERT FR
                          Computing Technology,         subject to the       denial.            PAGE NUMBER], 6/
                          a.k.a., the following two     EAR. (See Sec.                          24/19.
                          aliases:                      744.11 of the EAR)
                         --Jiangnan Institute of
                          Computing Technology; and
                         --JICT.
                         No. 699, Shanshui East Road,
                          Binhu District, Wuxi City,
                          China, and No. 188,
                          Shanshui East Road, Binhu
                          District, Wuxi City, China.
                                                                * * * * * *
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[[Page 29375]]

    Dated: June 18, 2019.
Richard E. Ashooh,
Assistant Secretary for Export Administration.
[FR Doc. 2019-13245 Filed 6-21-19; 8:45 am]
BILLING CODE 3510-33-P