Denied Party Digest

Valuable information about denied party screening

DOD Adds Thirteen to Chinese Military Companies List

On October 5, 2022, the U.S. Department of Defense added thirteen entities to its list of “Chinese military companies” operating directly or indirectly in the United States.  The list, required by Section 1260H of the National Defense Authorization Act for Fiscal Year 2021, is meant to highlight and counter the PRC Military-Civil Fusion strategy.  In particular, companies operating in the United States may be seeking access to advanced technologies and expertise through companies, universities, and research programs that appear to be civilian entities.

In the past, the Chinese military companies list has had significant overlap with other sanctions lists, such as Commerce Department's Entity List and Military End User (MEU) List, as well as Treasury's Specially Designated Nationals List and potentially others.  In the event that a member of the Department of Defense list of Communist Chinese military companies is not included on the MEU List or other sanctions lists, it should be considered a “red flag” for export compliance review.

The Department of Defense published a press release on the new listings, which includes a link to a pdf copy of the current Chinese military companies list.  With sanctions lists being updated on a nearly daily basis, continuous screening of customers, as well as intermediate parties and end users, is crucial for keeping up with changes.