Today, the Bureau of Industry and Security (BIS) in the Department of Commerce (Commerce) added Chinese National Offshore Oil Corporation (CNOOC) to the Entity List and Chinese company Skyrizon to the Military End-User (MEU) List. Both companies threaten U.S. national security, CNOOC by helping China intimidate neighbors in the South China Sea and Skyrizon for its capability to develop, produce, or maintain military items, such as military aircraft engines.
“China’s reckless and belligerent actions in the South China Sea and its aggressive push to acquire sensitive intellectual property and technology for its militarization efforts are a threat to U.S. national security and the security of the international community,” said Commerce Secretary Wilbur Ross. “CNOOC acts as a bully for the People’s Liberation Army to intimidate China’s neighbors, and the Chinese military continues to benefit from government civil-military fusion policies for malign purposes.”
Despite protests from the United States and other countries, China has been rapidly building the artificial islands since 2013, enabling the Communist Chinese Party’s militarization of disputed outposts in the South China Sea to undermine the sovereign rights of U.S. partners in the region. CNOOC has repeatedly harassed and threatened offshore oil and gas exploration and extraction in the South China Sea, with the goal of driving up the political risk for interested foreign partners, including Vietnam.
The Chinese government fuels its military development, in part, through aggressive policies that allow it to access and replicate sensitive technologies for its militarization efforts.
“Skyrizon—a Chinese state-owned company—and its push to acquire and indigenize foreign military technologies pose a significant threat to U.S. national security and foreign policy interests,” added Ross. “This action serves to warn the export community of Skyrizon’s significant ties to the People’s Liberation Army.”
The Entity List is a tool utilized by BIS to restrict the export, re-export, and transfer (in-country) of items subject to the Export Administration Regulations (EAR) to persons (individuals, organizations, companies) reasonably believed to be involved, or to pose a significant risk of becoming involved, in activities contrary to the national security or foreign policy interests of the United States. Additional license requirements apply to exports, re-exports, and transfers (in-country) of items subject to the EAR to listed entities, and the availability of most license exceptions is limited.
The MEU List informs exporters, re-exporters, and transferors that a license will be required to export, re-export, or transfer (in-country) designated items to listed entities. The U.S. Government has determined that these entities represent an unacceptable risk of use in or diversion to a ‘military end use’ or ‘military end user’ in China, Russia, or Venezuela. Skyrizon is the first company added to the MEU since it was introduced in late 2020.