More BIS Adds to Entity List for Russian Chips

The Commerce Department’s Bureau of Industry and Security (BIS) added 49 entities to the Entity List for providing support to Russia’s military and/or defense industrial base. Forty-two of the entries are based in the People’s Republic of China (PRC), with additional entities based in Estonia, Finland, Germany, India, Turkey, the United Arab Emirates (UAE), and the United Kingdom.

These entities supplied Russian consignees connected to the Russian defense sector with U.S.-origin integrated circuits, including those identified in “Tier 1” of the Common High Priority Items List developed by the U.S. and other international partners. Russia relies on these microelectronics for precision guidance systems in the missiles and drones it uses against civilian targets in its unlawful war in Ukraine. 

“We have been clear since the beginning—we will not hesitate to act against parties, wherever located, that facilitate the sale of U.S.-origin items to Russia’s military for its war against Ukraine,” said Under Secretary of Commerce for Industry and Security Alan Estevez. “No matter how convoluted the trail may be or how many hands items are passing through, if U.S.-origin items are finding their way to Russia’s military, we will work tirelessly to stop it.”

“These entities account for a significant portion of the global trade in U.S.-origin integrated circuits to Russia from March through July 2023 and our action today is a clear warning to others that we will not hesitate to act,” said Assistant Secretary of Commerce for Export Administration Thea D. Rozman Kendler.

“Today’s additions to the Entity List provide a clear message: if you supply the Russian defense sector with U.S.-origin technology, we will find out, and we will take action,” said Assistant Secretary for Export Enforcement Matthew S. Axelrod.  “But we also need the help of industry – we need you to exercise extra caution when shipping high-priority items to customers abroad, to help ensure those customers aren’t then funneling those items to Russian missile and drone programs.”

Text of the rule is available online here. This rule is effective as of October 6, 2023.

Developed in cooperation with partners such as the European Union, the United Kingdom, and Japan, the Common High Priority Items List includes items, identified by 6-digit Harmonized System (HS) codes, that pose a heightened risk of being diverted illegally to Russia because of their importance to Russia’s war efforts.  Notably, BIS has identified electronic integrated circuits in Tier 1 of the Common High Priority Items List, which covers items of the highest concern due to their critical role in the production of advanced Russian precision-guided weapons systems. Companies that ship integrated circuits or other items on the Common High Priority Items List face heightened risk of being caught up in Russia’s illicit procurement networks and may face regulatory action from BIS, among other consequences.

The Common High Priority Items List is available on BIS’s website here. To aid industry in preventing diversion of these items to Russia through third countries, BIS and its allies have published guidance on identifying Russian evasion patterns, red flags, and due diligence, including a best practice of obtaining end-use certifications, for exports of the highest priority items.  Additional information on BIS’s actions related to Russia’s invasion of Ukraine including additional compliance information for industry, academia, and other stakeholders is available on BIS’s Russia-Belarus Resources page here.