The US Dept of Commerce’s Bureau of Industry and Security has added 27 companies to its list of entities prohibited from doing business with the USA on grounds they threaten national security – and one of the firms is associated with HPE’s Chinese joint venture H3C.
A preliminary announcement [PDF] of the bans lists a company named New H3C Semiconductor Technologies Co., Ltd on the grounds of its “support of the military modernization of the People’s Liberation Army.”
The addresses given by Uncle Sam for this semiconductor business matches those listed on the website of New H3C, the Chinese company formed as a joint venture between HPE and Tsinghua Unigroup to build networking products. H3C is still the exclusive provider of HPE servers, storage, and associated technical services in China.
“I can confirm that the company is associated with New H3C. We are looking into the Commerce Department’s action today,” an HPE spokesperson told The Register.
We await the results of that investigation with great interest, as even though the US-based giant does not hold a majority position in H3C, the allegation that a firm with American connections has been named as acting against America’s interests is eyebrow-raising.
Secretary of Commerce Gina Raimondo characterized another eight newly banned Chinese firms as working to advance Beijing’s “efforts that support military applications, such as counter-stealth and counter-submarine applications, and the ability to break encryption or develop unbreakable encryption.”
Another 16 entities from China and Pakistan were added to the verboten entity list “based on their contributions to Pakistan’s unsafeguarded nuclear activities or ballistic missile program.” If you end up on this Dept of Commerce entity list, you will find it rather difficult to do lawful business with American organizations.
Corad Technology Limited, a Chinese firm that earned its place on the entity list in 2019, has been joined by three affiliates that the Commerce Department says have been selling US tech to the military and space programs of Iran, North Korea, and Chinese companies. Those affiliates operate from Singapore, Japan, and Shenzen.
A quick reminder: Pakistan and North Korea possess nuclear weapons and ballistic missiles with which to deliver them, to some degree, while Iran has the capacity or intent to build nukes.
The Moscow Institute of Physics and Technology also scored a ban, on grounds it has made military products for an unidentified military end-user.
The Commerce Department’s announcement of the new additions to its naughty lists characterizes the newly named Chinese firms as “PRC government and defense industry subordinate entities.” Those words reflect the USA’s belief that China uses private firms to obtain technology with military applications during what appears to be legitimate commercial activity.
China, in turn, paints its businesses as just trying to get their hands on the best tech available, in pursuit of products that will satisfy domestic and global buyers. ®