China’s Largest Nuclear Company Added to the Entity List

The Trump administration added another major Chinese company to the Entity List.  On August 14, 2019, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) added China General Nuclear Power Group—China’s largest state-owned nuclear company—to its Entity List. BIS added the company’s three affiliates as well: China General Nuclear Power Corporation, China Nuclear Power Technology Research Institute Co. Ltd., and Suzhou Nuclear Power Research Institute Co. Ltd. According to BIS, these entities have obtained or sought to obtain advanced U.S. nuclear technology and material for military uses in China. 

For years, the U.S. has trended in this direction. In 2016, the U.S. Department of Justice (DOJ) indicted China General Nuclear Power Company for conspiring to develop special nuclear material outside the U.S. without authorization from the DOE. Two years later, the U.S. Department of Energy (DOE) issued measures to prevent China from diverting U.S. civil nuclear technology to military uses. One such measure created a presumption of denial for new license applications or extensions to existing authorizations related to the China General Nuclear Power Group.  Last year, the Trump administration announced that it would impose more export restrictions on nuclear U.S. technology to prevent China from diverting such technology to military ends. 

BIS’s decision to add these nuclear Chinese entities to the Entity List advances this trend. Now, all U.S. and non-U.S. companies must seek government approval before exporting or reexporting any U.S. origin products, software, or technology subject to the Export Administration Regulations (“EAR”) to these entities. This includes products and technology that are not generally controlled for export to China, such as EAR99 items.  Companies seeking to re-export items subject to the EAR from a non-U.S. jurisdiction to China General Nuclear Power Group and its affiliates may also be required to seek government approval. Commerce’s stated policy on license requests is a presumption of denial.