14 DAY TRIAL // The U.S. Department of Commerce (DoC) announced the addition of the Fujian Jinhua Integrated Circuit Company, Ltd (Jinhua) to the Entity List because of a heightened risk of being involved in actions against national security interests of the United States, as first discovered by The Hill.
The Entity List Jinhua is now listed on is a document which identifies the entities (individuals, businesses, research institutions, or even government organizations) U.S. authorities believe to be involved, as well as posing a high risk of being or becoming involved at some point in the future in activities that affect the United States' foreign policy or national security.
Moreover, the Export Administration Regulations (EAR) also imposes a number of export and transfer requirements to entities listed on the Entity List, which means that all such operations to Jinhua will need to be licensed.
"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," says DoC's press release.
Jinhua has been added to the Entity List to fend off supply chain threats targeting military systems
As described in the DoC announcement, Jinhua is in the process of increasing their dynamic random access memory (DRAM) integrated circuits production, which would affect the viability of U.S. vendors who supply the same tech to 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," said Secretary of Commerce Ross. "Placing Jinhua on the Entity List will limit its ability to threaten the supply chain for essential components in our military systems.”
Although seeing the "threaten the supply chain for essential components" phrase in that statement might make some people think of Bloomberg's Super Micro Computer story, the Department of Commerce's action of adding Jinhua to the Entity List is most likely related to the increasing tensions between the U.S. and China during the last few weeks,
The Entity List is available for consultation on the Bureau of Industry and Security's website and, as you would expect it lists a large number of Chinese entities "that are subject to specific license requirements for the export, reexport and/or transfer (in-country) of specified items."