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U.S. Commerce and Treasury Departments Increase Sanctions Against Chinese Entities

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The United States Department of Commerce and Department of Treasury continue to ramp up sanctions against Chinese entities as part of the ongoing tension between China and the United States. 

The Commerce Department’s Bureau of Industry and Security (BIS) added 37 entities to the Entity List, including 34 Chinese research institutes and technology companies, linked to supporting China’s military modernization efforts or Iran’s weapons program.  Other entities added to the list were Georgia, Malaysia and Turkey suppliers of U.S.-origin items to Iranian defense companies.  These entities will be subject to a presumption of denial for all items subject to the Export Administration Regulations (EAR).  BIS also added three aliases used by Huawei.

BIS added China’s Academy of Military Medical Sciences an 11 of its research institutes for using “biotechnology processes” to support Chinese military uses and attempts to create “brain-control weaponry.” The research institutes and microelectronic companies are developing items to support China’s surveillance of Muslim minorities.

BIS also added several microelectronic companies which attempted to acquire illegally U.S.-origin items to advance China’s effort to modernize its military. Some of these companies provided U.S. goods to Iranian entities that were sanctioned as Specially Designated Nationals (SDNs) by the Department of Treasury’s Office of Foreign Asset Control (OFAC).

In a separate announcement, OFAC added eight Chinese technology firms to its blacklist, including drone maker DJI, for assisting the Chinese government to track and detain Muslim minorities in Xinjiang.  Also, OFAC added Cloudwalk Technology Co., Dawning Information Industry Co., Leon Technology Company, Megvii Technology, Netposa Technologies, Xiamen Meiya Pico Information Co. and Yitu.  The companies operate in China’s surveillance technology sector.  DJI is the world’s largest commercial drone producer, supplies drones to the Xinjiang Public Security Bureau was sanctioned by OFAC last year.

OFAC explained that the technology companies assisted Xinjiang authorities detain more than a million Uyghurs and other members of religious minority groups in re-education centers. Each of the companies “actively support the biometric surveillance and tracking of ethic and religious minorities in China” through the installation of thousands of neighborhood police kiosks and surveillance cameras, collection of biometric data for identification purposes, and more intrusive monitoring of internet use.”

CloudWalk, Megvii, Netposa and Yitu develop or supply facial recognition technology to Xianjiang authorities. Dawning Information and Leon Technology assembled surveillance systems to monitor minorities in Xinjiang. Xiamen developed a transcription and translation tool for Uyghur language that allows Xinjiang authorities to “scan electronic devices for criminal content.”


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