Unpacking U.S. Entity List and Its Export Control Regulations (Entity List Part I)

解读美国实体清单和出口管制条例

HUANG & HU continues to keep a close watch on the newest change in the U.S.-China trade regulations and policies, and to assist entities with risk management and compliance in the cross-border transactions between U.S. and China.

清水正东律师事务所持续关注中美出口管理条例的最新动态，为企业关于中美贸易如何风险合规提供法律服务。

In 2019, the U.S. Department of Commerce added Huawei and 68 of its subsidiaries to the country’s Entity List; December 2020, another 77 more entities were designated, among which were 60 Chinese entities. Again in July 2021, the Biden administration “blacklisted” another 23 Chinese entities.  The Entity list has been grabbing the limelight during the China-U.S. trade war. What is the Entity List, and what makes this list so powerful that the U.S. government uses it frequently in its effort to fight against China and Chinese companies?

 2019年，美国商务部宣布将华为及其70家子公司列入实体名单之列；2020年十二月，美国商务部将77个实体加入该名单，其中60间为中国实体。今年七月，拜登政府再次将23家中国实体列入管制清单。中美贸易战以来，“实体清单”一次次成为焦点备受讨论。这个实体清单究竟是什么，又是因何成为中美贸易战中美国频繁使用的强有力武器之一呢?

1.     Export Administrative Regulation and Entity List 出口管理条例与实体清单

Source: Bureau of Industry and Security (BIS)

The “Entity List” can be found as Supplement No. 4 to Part 744 of the Export Administrative Regulation (EAR).The list contain a list of names of certain foreign persons – including businesses, research institutions, government and private organizations, individuals, and other types of legal persons – that are subject to specific license requirements for the export, reexport and/or transfer (in-country) of specified items.       

实体清单实际上是美国《出口管理条例》第744部分的“管制措施”下的附录四。顾名思义，在这一附件中列有一系列国外商业实体、研究机构、政府及私有组织、个人及其他法人。此向名单内列出的实体出口、转出口及境内转让特定物品，需要按清单内的具体规定申办特殊的出口许可。 

The Entity List is created and executed by BIS. BIS first published the Entity List in February 1997 as part of its efforts to inform the public of entities who have engaged in activities that could result in an increased risk of the diversion of exported, reexported and transferred (in-country) items to weapons of mass destruction programs. Since its initial publication, grounds for inclusion on the Entity List have expanded to activities sanctioned by the State Department and activities contrary to U.S. national security and/or foreign policy interests. The ERC, composed of representatives of the Departments of Commerce, State, Defense, Energy and, where appropriate, the Treasury, makes all decisions regarding additions to, removals from, or other modifications to the Entity. The ERC makes all decision to add an entry to the Entity List by majority vote and makes all decisions to remove or modify an entry by unanimous vote. Each amendment of the Entity List will be executed in the form of administrative final rule.

《出口管理条例》由美国工业及安全局负责实施及执行。实体清单第一次于1997年二月公布，目的是限制向可能使用大规模杀伤武器的实体进行出口。自第一公开面世以来，加入实体名单的原因已经扩展至工业及安全局有合理理由认为曾经参与、正在参与，或是很大机会正在参与或将会参与不利于美国国家安全或外交政策利益的活动的实体。清单内的实体增加或移除由终端用户审查委员会投票决定。这个委员会是由商务部、国防部、能源部和财务部的代表组成。最终的实体名单以及实体项下的具体出口管制措施，由美国商务部通过行政立法的方式公布。 

2.     Consequences of Designation to the Entity List     被列入实体清单的后果

In order to understand the legal consequences of being added to the Entity List, it is necessary to understand the basic regime under EAR. EAR governs all the export, reexport, and transfer (domestic) of items with “dual intent” (both civil and military intent). Items over which BIS exercises regulatory jurisdiction under the EAR include:

想要理解实体清单的法律后果，首先需要理解《出口管制条例》的基本模式。该条例规管“两用”产品（民用和军用）的出口、转口和国内转让。《出口管制条例》对物项的管辖包括：

• All items in the United States, including in a U.S. Foreign Trade Zone or moving in transit through the  United States from one foreign country to another;

• All U.S. origin items wherever located;

• Foreign-made commodities that incorporate controlled U.S.-origin commodities, foreign-made commodities that are ‘bundled’ with controlled U.S.-origin software, foreign-made software that is commingled with controlled U.S.-origin software, and foreizgn-made technology that is commingled with controlled U.S.-origin technology;

• Certain foreign-made direct products of U.S. origin technology or software. 

• 实际位于美国的商品、软件和技术(包括经美国转运的物品和位于对外贸易区的物品)。

• 不论位于世界何地，所有源自美国的商品、软件和技术。

• 通过整合、加入美国的商品、软件、技术生成的外国软件/技术。

• 利用美国技术或软件在外国直接制造的某些特定产品。

EAR’s jurisdiction is so broad that it governs basically all the items which by themselves are, or using technology or software during the process of being, manufactured, transported, processed or assembled in the United States. Different restrictions are enforced onto different items based on its category in the Commerce Control List (CCL). CCL lists the item and its corresponding Export Control Classification Number (ECCN) denoting the reason for its restriction. Items that do not have an ECCN will be designated EAR99.  The EAR99 classification is generally assigned to low technology or low risk items that do not require an export license. However, the export of EAR99 items may be prohibited or require an export license depending on their destination country or end user, part of which is determined by the Entity List.

可见《出口管理条例》的管辖范围极其宽泛，包括了所有在美国、或使用美国技术或软件生产、运输、加工、组装的物品。为了在如此庞大的管辖范围内明确具体的管制物项及要求，美国商务部制定了《商业管制清单》, 用5位数的ECCN编码对所有管控物项进行归类并确认该物项的管制原因、管制级别、以及是否需要许可。ECCN物项被细分为十类，不包括在这十类内的一般为科技含量较低的物项，被同一归类为EAR99。通常情况下，对EAR99物项进行出口、再出口和转让时，不需要任何的许可证。然而如EAR99物项被出口至被制裁国家，或接收方位于实体名单之内，那么也可能被要求申请相关的许可。

The Entity List specifies the license requirements that it imposes on each listed person. Those license requirements are in addition to license requirements imposed elsewhere in the EAR. The Entity List also specifies the license review policy for each entity, indicating the standard BIS will adopt in its decision of whether to issue an exporting license or not. Presumption of denial is the most common review policy, which means that BIS will presume the license application should be denied unless the applicant provides sufficient evidence to overcome such presumption.

清单实体将会被注明“许可证要求”和“许可证审查政策”。“许可证要求“规定哪些物品需要办理许可。”许可证审查政策“规定BIS将采取什么样的裁量方式进行许可证申请的审查。而通常情况下，在对出口许可证进行审查时，都会采取“拒绝推定”，也就是说，在审查出口许可证的申请时首先推定为拒绝签发出口许可证，除非申请人能够提供足够的证据推翻上述推定。

 Source: BIS

Even though an entry in the Entity List does not necessarily mean prohibition from all the export activities, but only a need to apply for a license. However, in fact, once being added, the listed entity will face an extremely difficult situation to obtain any products, software or technology related to the United States; which can be devastating for the companies who greatly rely on importing from the U.S. This is because EAR implements a very strict reviewing policy against the issuance of export licenses. Meanwhile, in practice, most of the U.S. entities (and entities from EU, Japan and Korean who greatly rely on U.S. technology) will tend to refuse engaging in any transactions with the listed entities. The reasons behind this tendency are not only the difficulty of obtaining a license, the potential risk of being sanctioned, but also the lengthened transaction cycle and increased cost caused by such a process. After Huawei’s entry to the Entity List, ARM, Google, Intel, Galton and many other Huawei’s suppliers and partners chose to terminate their future transactions. 

因此，从表面上看，清单实体面临的是出口许可证的申请，而不是直接限制出口企业与清单实体就相关物项进行出口的行为。但实际情况是，一旦被列入实体清单，该企业想要获取与美国相关的产品、软件、技术就变得非常困难。这主要是因为EAR在出口许可证的签发问题上采取的是相当严格的审查政策。并且在实践中，绝大部分美国企业（以及对美国技术存在依赖的欧盟、日本、韩国等国家的企业）都会拒绝与清单实体进行相关交易，不仅是因为申请许可证的难度极大，面临巨大的处罚风险，而且即便可以获得许可证也会使交易周期加长，大大增加交易成本。这就直接导致了清单实体实际上无法获取与美国相关的产品、软件、技术。如果该企业的业务领域对美国产品或技术具有很大依赖性，则对其来说可能造成毁灭性的打击。2019年，在华为被列入实体清单后，英国芯片公司ARM、谷歌、英特尔、高通等合作方及供应商就宣布了终止与华为的合作。

3.     New Trends for Entity List Designations      被列入实体名单依据的新趋势

Biden administration has amended the Entity List four times to include Chinese entities in 2021. In these new amendments, “human rights abuses” has become a determinative ground for the designation. The June 2020 Entity List designations were the first time the Entity List was used as a tool to punish companies engaging in alleged human rights abuses, specifically forced labor. Some of the designated entities under this ground are accused of “participating in the practice of, accepting, or utilizing forced labor”or “principally involved in surveillance and artificial intelligence.” 

2021年，拜登政府已经四次修订实体清单将纳入新的中国实体。在这些新增订的名单中， “违反人权“持续成为了一项决定性依据。涉及到的具体因素可能有“利用、接受强制劳动力“、“生产可能用于政府监视技术或软件“。

In addition, “military end-user” and “supporting military actions” continue to be the most common grounds for designations. Under this ground, one newly emerged factor appears to be involvement in land reclamation and construction activities in disputed territory in the South China Sea. The United States continues to utilize Entity List to exert restriction on entities who are or may threat U.S. technology advantaged status in the world, especially Chinese entities whose technology development are highly supported by imports of materials and technologies from the U.S. Close relationship with military end user, human rights abuses, or transactions with sanctioned countries, all can be designated factors under this concern.

除此之外，终端用户涉及军方或者支持军事行动仍然是常见的被纳入清单的理由。在这一风险类别下，具体因素可能涉及参与在南海争议岛屿的军事行为。美国持续使用实体清单这一工具阻碍可能会威胁美国技术优势的实体，尤其是通过采购源自美国的配件、技术来支持其高性能计算技术开发的中国实体。与军方存在紧密联系、违反人权，或者与美国制裁国家进行交易，都有可能成为基于这一担忧的指定依据。

Entity List is a powerful political tool for the U.S. government to restrict export independently and unilaterally and is not limited by any action of Congress or international organizations. It was revived by the Obama administration and has been reinforced constantly during the trade war because of its agility and effectiveness.  In the last 10 years from 2010 to 2020, there was a 420% increase for entries to the Entity List from the prior 10-year period of 2000-2010. Regional focus has shifted from the Middle East to Russia to China over the prior two decades, and the industry focus shifted from aerospace and missiles to companies building surveillance equipment and integrated circuits, reflecting the evolving aims and priorities of US foreign policy.

实体清单是美国政府可以单方面独立实施的出口管制，不受国会或任何国际组织的限制，可以快速、有效地起到限制清单内实体活动的作用，因此近两年来被频繁使用。与2000至2010年的十年期间相比较，2010年至2020年，实体清单的指定数量呈现了420%的增长。目标地区从中东及俄罗斯转变为中国，而目标行业也从航空、导弹转移至监控设备及集成电路行业，充分体现了美国对外政策的重心和目标。

Source: https://www.belfercenter.org/publication/united-states-entity-list-limits-american-exports

Note：      

【1】2021 Entity List 最新实体名单参见: https://www.ecfr.gov/api/renderer/v1/content/enhanced/2021-10-08/title-15?appendix=Supplement+No.+4+to+Part+744&chapter=VII&part=744&subchapter=C&subtitle=B