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US Restricts export with Russian, Chinese entities over military ties

News Agencies | Updated on: 22 December 2020, 13:14 IST

In another major setback to China, the US has designated 58 Chinese companies out of 103 companies as foreign entities with military ties thereby restricting export, re-export and transfers with them.

Along with the 58 Chinese companies, the remaining are Russian companies, the US Commerce Department said.

According to a statement from the Commerce Department, the Bureau of Industry and Security (BIS) will amend the Export Administration Regulations (EAR) by adding a new 'Military End User' (MEU) List, as well as the first tranche of 103 entities, which includes 58 Chinese and 45 Russian companies.

"The US Government has determined that these companies are 'military end users' for purposes of the 'military end-user' control in the EAR that applies to specified items for exports, reexports, or transfers (in-country) to the China, Russia, and Venezuela when such items are destined for a prohibited 'military end-user'," the statement read.

"This action establishes a new process to designate military end-users on the MEU List to assist exporters in screening their customers for military end-users," said Commerce Secretary Wilbur Ross as quoted by the statement.

Ross said that the department recognizes the importance of leveraging its partnerships with the U.S. and global companies to combat efforts by China and Russia to divert U.S. technology for their destabilizing military programs, "including by highlighting red flag indicators such as those related to Communist Chinese military companies identified by the Department of Defense."

Among restricted Chinese entities are the Aero-Engine Company, Aviation Industry Corporation, Academy of Aerospace Solid Propulsion Technology, CAST Xi'an Spaceflight Engine Factory and Government Flying Service.

The Commerce Department said that the MEU List informs exporters, re-exporters, and transferors that a license will be required to export, reexport, or transfer (in-country) designated items to listed entities.

"The US Government has determined that these entities represent an unacceptable risk of use in or diversion to a 'military end-use' or 'military end-user' in China, Russia, or Venezuela... The MEU List supports the export community by identifying military end-users known to the U.S. Government, improving the effectiveness of military end-use and military end-user controls," it added.

Last week, the US Department of Commerce has added 59 Chinese entities to its export-control Entity List including Semiconductor Manufacturing International Corporation (SMIC) for activities that undermine America's national security and foreign policy interests.

This comes after the US, in October, imposed sanctions on six Chinese companies for their dealings with Islamic Republic of Iran Shipping Lines (IRISL), which is used by Iran to "transport proliferation-sensitive items intended for Iran's ballistic missile and military programs".

In July, Washington announced sanctions against a new group of 11 Chinese companies for their alleged involvement in human rights violations in China's western province of Xinjiang, home to about 1 million Uyghurs Muslims.

The Commerce Department added those 11 companies to a trade blacklist, bringing nearly 50 Chinese entities on the list, and restrict them further from access to American technology as well as other goods, The Washington Post reported.

"Beijing actively promotes the reprehensible practice of forced labour and abusive DNA collection and analysis schemes to repress its citizens," Commerce Secretary Wilbur Ross said in a statement.

China and the US are at loggerheads since President Donald Trump took office over many issues including trade, Indo-Pacific, COVID-19, Hong Kong, and Uyghur. The tensions between the two countries have escalated in recent times.


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First published: 22 December 2020, 12:55 IST