Commerce Threatens Penalties, Entity Listings for Violating Russia Export Controls
The Commerce Department could impose strict export controls, including through the Entity List, on Chinese companies that violate U.S. export restrictions against Russia, agency officials said this week.
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Secretary Gina Riamondo said Commerce can "essentially shut" down any Chinese company that defies the sanctions, including Semiconductor Manufacturing International Corporation, The New York Times reported March 8. Raimondo said Russia is "certainly going to be courting other countries to do an end run around our sanctions and export controls," according to the report. If SMIC sells chips to Russia, "we could essentially shut SMIC down because we prevent them from using our equipment and our software,” Raimondo said, adding that "it would be devastating to China’s ability to produce these chips." A Commerce spokesperson didn't immediately comment.
Similarly, a senior official at Commerce's Bureau of Industry and Security said this week the agency could place companies on the Entity List for violating the Russia export controls. Matthew Axelrod, BIS’ assistant secretary for export enforcement, said the agency has already “begun robust engagement” with exporters to make sure they understand the new restrictions, which so far have included two new foreign direct product rules, new controls on oil refinery equipment and more (see 2202240069 and 2203040020).
“We will remain proactive and vigilant in detecting and dismantling illicit networks and will bring the full force of the law to hold accountable those that knowingly violate the new rules,” Axelrod said in a statement this week, “including by placing additional parties on the Entity List.” Axelrod, whose comments were first reported by Reuters, said BIS' enforcement division is “already working to leverage all of our resources and partnerships to maximize the effectiveness of the new rules.”