Sanctions by the Numbers: SDN, CMIC, and Entity List Designations on China

In contrast to the SDN and CMIC lists, the Entity List restricts the flow of technologies and goods rather than financial transactions. The Entity List is a mechanism by which the Commerce Department imposes a unique export restriction for specified types of U.S.-origin goods on a particular entity. When the government adds an entity, whether that be a foreign person or company, to the Entity List, exporters of U.S.-origin goods are restricted from the export, re-export, or in-country transfer of specified U.S.-origin items, technology, and software to the listed person. In certain cases, the government may also control the export of foreign-origin items to listed entities through application of a foreign-produced direct product rule (FDPR), an extraterritorial application of U.S. authorities that is discussed in more detail in this installment. Decisions on additions to or removals from the Entity List are formally made by the End User Review Committee, an interagency body chaired by the Department of Commerce that includes the Departments of Defense, Energy, and State.

On the SDN list, a single designation of a parent entity automatically applies the sanction to all subsidiary entities in which the parent entity has a 50 percent or greater holding. The CMIC list and Entity List, however, must specify each covered entity or subsidiary, which requires a larger number of designations to achieve the same coverage.

Evolution of U.S. Sanctions and Entity List Designations of Chinese Persons

The State Department also has its own delegated sanctions authorities, including some that give it the ability to sanction Chinese persons under functional or global authorities, in addition to being formally consulted on SDN, CMIC, and Entity List designations. Similar to OFAC sanctions, these can have a range of effects including visa bans, cutting off certain areas of business activities with U.S. persons, or a full blocking designation (which would put that sanctioned entity on OFAC’s SDN list). For example, the State Department’s Bureau of International Security and Nonproliferation administers the Iran, North Korea, and Syria Nonproliferation Act (INKSNA) sanctions, which address entities involved in nuclear proliferation in Iran, North Korea, and Syria. On the export controls side, the State Department, through the Directorate of Defense Trade Controls, has a separate debarred parties list for companies that sell arms to proscribed countries such as the PRC. These State Department authorities are not represented in the data here.

SDN Designations

The United States has steadily increased the SDN designations of Chinese persons over the last two decades, imposing designations under a widening range of sanctions programs. Under the eight years of the George W. Bush administration, the United States implemented a total of 13 SDN designations of Chinese persons. There are currently 398 Chinese persons on the SDN list.

Evolution of SDN List Designations of Chinese Persons by Administration, 2000–2022

During the Bush administration, programs aimed at narcotics trafficking and nuclear proliferation represented the majority of SDN designations on Chinese persons. Under Barack Obama’s administration, these were joined by programs sanctioning Chinese persons for their activities providing material aid to sanctioned Iranian entities, fomenting global terrorism, and aiding sanctioned Syrian entities. Under Donald Trump’s administration, sanctions for providing material aid to sanctioned Iranian entities represented a plurality of sanctions targeting Chinese persons, along with sanctions related to China’s antidemocratic crackdown on Hong Kong, aiding the Democratic People’s Republic of Korea (which before had largely been covered by the Non-proliferation of Weapons of Mass Destruction sanctions program), and human rights abuses (the Global Magnitsky Act). The Biden administration has stayed the course so far, with sanctions against Chinese persons involved in providing material aid to sanctioned Iranian and North Korean entities, global terrorist networks, human rights abuses, China’s actions in Hong Kong, and drug trafficking.

SDN List Sanctions on Chinese Persons by Type of Program, 2000–2022

The growth in the number of SDN designations of Chinese persons parallels a growth in the number of underlying sanctions programs. A majority of SDN designations of Chinese persons target them for providing material support to sanctioned countries like Iran or contributing to nuclear proliferation, and are not aimed at China itself. Therefore, though the growth in SDN designations may reflect broader bilateral tensions given the United States’ previous hesitation to target China as aggressively, it is more likely the result of the growing use of sanctions as a U.S. foreign policy tool globally. It may also reflect the interconnectedness of Chinese firms in global trade, including both licit trade and illicit trade with U.S. adversaries such as Iran. Some 258 SDN designations of Chinese persons since 2000 were executed under sanctions programs not directed at China versus 67 designations that were. It is Chinese persons’ involvement with sanctioned Iran, nuclear proliferation, and other illicit activity—not the actions of the Chinese government or U.S. policies directed at China—that provoke the vast majority of SDN designations.

The exceptions to this broader trend are the HK-EO13936 program and the Global Magnitsky Act human rights program. These two programs sanction Chinese persons for actions supported or directed by the Chinese state, and therefore can be considered to target China directly. The HK-EO13936 program has been used to sanction 42 Chinese persons for undermining Hong Kong’s autonomy and restricting the freedom of expression or assembly of the citizens of Hong Kong. The Global Magnitsky Act program has been used to sanction 25 Chinese persons: 15 government persons primarily for human rights abuses in Xinjiang, 8 persons for human rights abuses related to forced labor in fishing operations, and another 2 persons for human rights abuses in Tibet.

The fishing sanctions are part of a larger administration effort to combat forced labor. The United States raised similar concerns during World Trade Organization (WTO) negotiations on a fisheries agreement, but U.S. proposals to address forced labor on fishing vessels were ultimately not included in the final deal. These sanctions also represent the first time a NASDAQ-listed company, Pingtan Marine Enterprise, Ltd., has been listed on the SDN list. Pingtan, as well as Dalian Ocean Fishing Co., Ltd. and their associates operate a fleet of 157 vessels, each of which was individually sanctioned. However, these are not represented on the graphs above because they are not individuals or entities.

CMIC Designations

The CMIC list is a relatively new program established under the Trump administration. The Biden administration retained and amended the program but has generally not expanded its use. Sixty-eight persons are listed on the CMIC list.

In November 2020, the Trump administration used the Communist Chinese Military Companies (CCMC) list to create a new non-SDN sanctions program to ban U.S. persons from purchasing or selling publicly traded securities of designated persons, which were defined as those operating in the defense or related materiel sector and supporting the PRC’s “military, intelligence, and other security apparatuses.” The list was placed under the authority of the Department of Defense, pursuant to Executive Order 13959, which itself was amended by Executive Order 13974 in January 2021. The original requirement to create the CCMC list was included in the 1999 National Defense Authorization Act but was not given any practical effect until it was used as the basis for the investment restrictions under Executive Order 13959.

In June 2021, the Biden administration revised this non-SDN sanctions program, establishing the new CMIC list and placing it under the authority of the Department of the Treasury pursuant to Executive Order 14032. Executive Order 14032 expanded the policy objective of the CMIC list by including new authorities for the government to sanction firms operating in Chinese surveillance technology “to facilitate repression or serious human rights abuse,” in addition to the previously included defense and related materiel sector. Some entities on the CMIC list overlap with those on the CCMC list, but there are many additions and deletions. Only 27 of the entities listed on the prior CCMC list are included on the current CMIC list.

Entity List Designations

The Entity List has evolved significantly since its inception in 1997 under Bill Clinton’s administration, and now 603 Chinese persons are included on the Entity List.

The Entity List was established as part of the Enhanced Proliferation Control Initiative to counter the spread of the capability to produce or acquire weapons of mass destruction. In June 2007, the scope of the Entity List was expanded to include parties that are engaged, have been engaged, or risk being engaged in “acting contrary to the national security and foreign policy interests of the United States.” In August 2008, a separate rule codified the role of the End-User Review Committee, which approves modifications to the Entity List and includes Commerce, Defense, State, and Energy. The growing number of Chinese persons on the Entity List shows a concerted effort by the United States to limit China’s access to certain U.S. technology: an effort that has grown more insistent with each administration.

The United States has also developed novel foreign direct product rules that expand the scope of the Entity List to apply U.S. controls on items produced entirely outside of the United States even if they contain no U.S. content, if those products are made using U.S. tools or software.

While more limited foreign direct product rules had existed before (the first version of the rule was published in 1959), the Trump administration significantly expanded the use of this tool by developing a company-specific Entity List designation for the Chinese tech giant Huawei. It prohibited the export of certain foreign-made items that were produced using U.S. tools and software and prevented Huawei from receiving all U.S-made items subject to Export Administration Regulations. In practice, this cut Huawei off from the global supply of computer chips, as nearly all chips in the world are made using U.S. tools and software. Some observers have speculated that the novel foreign direct product rule was developed as a means of targeting Huawei without putting it on the SDN list. Huawei has struggled to survive these actions, falling from the second largest smartphone company by market share behind Samsung to the ninth, primarily due to its inability to source high-end chips for its smartphones, the core of its business.

In October 2022, the Biden administration released a set of sweeping export control rules related to advanced computing and supercomputing, including, among other new controls, a further expansion of foreign direct product rules and their application to the Entity List. These rules impose a foreign direct product rule on 28 Chinese companies in the supercomputing sector that were already on the Entity List. At the same time, the administration also issued a second set of rules that expedited the process for adding entities to the Entity List, reflecting longstanding concerns related to the government’s ability to conduct monitoring activities in China to ensure that importers are not diverting technologies to prohibited end uses or users.

In December 2022, the Biden administration added 36 Chinese entities to the Entity List, 21 of which are subject to a foreign direct product rule. The highest profile addition—Yangtze Memory Technologies Co., Ltd. (YMTC), China’s largest memory chip producer—was designated because of the risk of diversion of U.S.-controlled items to Huawei and Hikvision, both of whom are listed on the Entity List. YMTC, however, is not subject to the foreign direct product rule; the 21 entities that are subject to it are major AI chip research and development firms with close ties to Chinese government entities.

The use of the foreign direct product rules in October and December represents a significant shift in U.S. export control posture toward China. Whereas the prior use with Huawei might have been viewed as an isolated action, the new set of rules confirms that the Biden administration sees the foreign direct product rules as an integral part of its toolkit for managing technology transfer risks associated with China. It may also prove controversial with key U.S. partners and allies, which to date have not imposed similar controls (and may not have the legal authorities to do so) and historically have opposed the extraterritorial application of U.S. law on their companies.

Cross-listings

There are several cross-listings across the SDN list, CMIC list, and Entity List. Each program has its own set of legal requirements and policy rationale, and thus entities that are on one list may not necessarily have an automatic justification for being added to another.

The SDN and CMIC lists are themselves mutually exclusive, but each overlaps to some extent with the Entity List. The Global Magnitsky Act program is the only SDN program that cross-lists with the Entity List: the SDN’s inclusion of the Xinjiang Public Security Bureau overlaps with 20 Entity List listings of subsidiary public security bureaus and related entities, which are therefore subject both to financial sanctions and to export controls for all U.S. items.

There is more overlap between the Entity List and the CMIC list. Roughly 20 separate designations on the CMIC list are also on the Entity List or have a subsidiary on it. At least 145 Entity List designations, most of which are not themselves “investable,” as they do not issue public securities, are subsidiaries of entities listed on the CMIC list. That said, there remain certain targets that have not been cross-listed. Some 48 CMIC-designated entities are not covered on the Entity List (and so can receive exports of U.S. origin goods), while at least 74 companies on the Entity List that issue equity are not covered on the CMIC list (and so remain “investable”).

Human Rights and Democracy

The United States has used all three lists to respond to China’s systemic human rights abuses. For example, in response to human rights abuses in Xinjiang, the United States in October 2019 added to the Entity List the Xinjiang Public Security Bureau and 19 of its subsidiary entities, including the Xinjiang Police College. This was followed in June 2020 with the designation on the SDN list under the Global Magnitsky Act of the Xinjiang Public Security Bureau, the Xinjiang Production and Construction Corps, and six Chinese Communist Party members operating in the area.

In Hong Kong, a broad crackdown on the city’s civil society and mass arrests of anti-government protesters led to the July 14, 2020, passage of the Hong Kong Autonomy Act and Executive Order 13936, which enabled U.S. sanctions on persons involved in the crackdown. So far, 42 Chinese persons have been sanctioned under this authority.

The case of Hikvision, a Chinese surveillance technology firm, is one example of how the different lists may be deployed. In 2019, the Department of Commerce added Hikvision to the Entity List for its involvement in the high-technology surveillance of Uyghurs. (This set of October Entity List designations included six other technology companies as well as the government entities mentioned above.) Hikvision was subsequently added to the CCMC list, and today remains on the CMIC list. Reports in 2022 indicated that the Biden administration may have considered adding Hikvision to the Treasury’s SDN list for human rights abuses related to the Uyghur minority population in Xinjiang. Consideration of an SDN listing may reflect frustration that the existing measures have had minimal impact on Hikvision, though any move to add Hikvision to the SDN list would be a significant escalation of U.S. policy toward Chinese tech firms.

In addition to financial and technology sanctions, the U.S. government is implementing a wide range of other measures in response to China’s human rights abuses. The new export controls announced in October 2022 on advanced chip production and supercomputing were based in part on concerns that advances in these technologies could enable China’s systemic human rights abuses. These export controls included a range of measures beyond Entity List designations and restricted more broadly the flow of certain U.S. technology and expertise to China. In December 2021, the U.S. Congress, with overwhelming bipartisan support, passed the Uyghur Forced Labor Prevention Act, which bans imports from Xinjiang over concerns that products from the region are made using slave labor.

U.S. Allies on China Sanctions

The Biden administration has prioritized a multilateral approach to foreign policy, including for sanctions and export controls. In its 2021 Sanctions Review, the Treasury listed “incorporating multilateral coordination, where possible” as its second step to modernize sanctions. However, the broader commitment to multilateralism has been less evident in the actual implementation of sanctions and export controls regarding China specifically. Though some U.S. allies have issued sanctions against Chinese entities for issues such as cyber intrusions or—in the case of Australia—for aiding Syria or Iran, these are limited to only a handful of targeted entities per country. No U.S. ally has imposed sanctions on Chinese persons as robust as those of the United States, and no country maintains an equivalent to the CMIC list.

There are only two areas where sanctions on designated Chinese persons have been coordinated: United Nations sanctions and a set of ad hoc human rights sanctions effected in March 2021. Allies and partners including Australia, Canada, the European Union, New Zealand, the United Kingdom, South Korea, and Taiwan have all taken steps to implement the UN sanctions, eight of which are on Chinese entities and are primarily aimed at North Korean nuclear proliferation.

Separately, in March 2021, the Biden administration helped coordinate with Canada, the European Union, and the United Kingdom a set of sanctions targeting China for its human rights abuses in Xinjiang. The sanctions effort was followed by significant Chinese retaliation, including China’s sanctioning of 27 EU officials, and by the disintegration of the EU-China Comprehensive Agreement on Investment, a major bilateral investment deal, as EU officials refused to move forward while their colleagues were under sanction.

In the export control space, many allies rely on list-based or end-use export controls and do not maintain Entity List equivalents that can prohibit exports to particular persons. That said, Taiwan maintains a list similar to the U.S. Entity List, and Japan maintains a list that restricts the end user for certain Japanese-made products. The Taiwanese list includes roughly 207 Chinese entities and the Japanese list 75. Neither list includes some of the most sensitive U.S. designations such as those of Huawei or Hikvision.

Future Outlook

Moving forward, the United States will continue to use of a range of financial- and technology-related sanctions to address national security and foreign policy concerns with China. To date, the U.S. government has been relatively restrained in using the most stringent types of financial sanctions to manage the technology and economic competition with China, instead focusing on particular bad actors and concerns around human rights. Technology restrictions have been used much more aggressively, including to address concerns related to China’s military modernization and human rights abuses. A key factor to watch in coming years is the U.S. appetite to use SDN listings to aggressively target large and globally prominent Chinese firms, including in the tech sector. Doing so would indicate a U.S. willingness to escalate its coercive economic statecraft measures toward China. The United States is also likely to explore new types of economic restrictions short of an SDN listing, including controls on U.S. investment in China, which is under consideration in Congress and the administration. Whether the United States can build a broader consensus among allies and partners on the expanded use of these tools remains an open question. Doing so will be critical for ensuring the long-term durability and political legitimacy of the U.S. strategy.

Methodology

The OFAC website search function was used to count current SDN and CMIC numbers. The Entity List was used to count current Entity List numbers: for consistency, subsidiary entities were counted separately from parent entities, even in cases where the subsidiary and parent exist as a single entry on the Entity List. A database compiled by the Center for a New American Security was used to count historical SDN, CMIC, and Entity List numbers. This report does not include any actions taken after December 31, 2022.

Sanctions numbers for Hong Kong are included within the total China numbers for this report.

Sanction designations often overlap with several different sanctioning authorities, including country-specific and thematic sanctions programs. In cases where a single designation is pursuant to multiple sanctioning authorities, the designation was counted once within the total designation number but attributed to each pursuant sanctioning authority. For example, if the Treasury designated Entity X pursuant to GLOMAG and HK-EO13936, then that single designation was recorded once for the total designation of U.S. sanctions but contributed to both the GLOMAG and HK-EO13936 designation numbers.

All Treasury sanctions designations were drawn from the following OFAC sanctions programs: CAATSA-RUSSIA, CMIC-EO, CMIC-EO13959, CYBER2, DPRK2, DPRK3, DPRK4, GLOMAG, HK-EO13936, IFCA, ILLICIT-DRUGS-EO, IRAN, IRAN-13871, IRAN-EO13846, IRAN-EO13871, NPWMD, PART 561 LIST, RUSSIA-EO14024, SDGT, SDNTK, SYRIA, TCO, UKRAINE-EO13661, UKRAINE-EO13662, VENEZUELA, and VENEZUELA-EO13850. (Designations pursuant to CMIC-EO, CMIC-EO13959, and PART 561 LIST are non-SDN designations.)

All information regarding additional sanctions, export controls, and other economic measures from the Departments of Commerce and State were drawn from public government sources: Federal Register notices, press releases from the Departments of Commerce and State, the Department of Commerce’s Entity List, and the Bureau of Industry and Security (BIS) website.

Acknowledgments

The authors would like to acknowledge the CNAS Communications and Publications Teams for their support, design, and editing. The authors would also like to thank Thomas Krueger, CNAS Adjunct Senior Fellow, and Emily Weinstein, Research Fellow at the Center for Security and Emerging Technology at Georgetown University for their review of this report. This report was made possible with general support to CNAS.

As a research and policy institution committed to the highest standards of organizational, intellectual, and personal integrity, CNAS maintains strict intellectual independence and sole editorial direction and control over its ideas, projects, publications, events, and other research activities. CNAS does not take institutional positions on policy issues and the content of CNAS publications reflects the views of their authors alone. In keeping with its mission and values, CNAS does not engage in lobbying activity and complies fully with all applicable federal, state, and local laws. CNAS will not engage in any representational activities or advocacy on behalf of any entities or interests and, to the extent that the Center accepts funding from non-U.S. sources, its activities will be limited to bona fide scholastic, academic, and research-related activities, consistent with applicable federal law. The Center publicly acknowledges on its website annually all donors who contribute.

About the Authors

Emily Kilcrease is a Senior Fellow and Director of the Energy, Economics, and Security Program at CNAS. Her research focuses on the U.S.-China economic relationship; alignment of national security objectives and economic policy; and geoeconomic statecraft. Kilcrease previously served as a deputy assistant U.S. trade representative (USTR), overseeing the development, negotiation, and coordination of U.S. foreign investment policy. She served as the senior career staffer leading USTR’s work on the Committee on Foreign Investment in the United States (CFIUS) and coordinated USTR’s policy engagement on related national security and economic tools, including export controls and supply chain risk management. Additionally, Kilcrease served on the National Security Council (NSC) as a director for international trade, investment, and development. Prior to the NSC, she served at the Department of Commerce overseeing the department’s CFIUS work. She began her government service at the Department of Interior working on trade and environment policy. Kilcrease received her MA in international relations, with a concentration in international development and economics, from the Johns Hopkins School of Advanced International Studies. She received her BA in government from Georgetown University.

Michael Frazer is a Research Contractor for the Energy, Economics, and Security Program at CNAS. He began his CNAS career as the Joseph S. Nye, Jr. Intern for the program. Michael is pursuing a master’s degree in East Asian Studies at The Ohio State University. His interests include economics and Japan. His current focus is on the gold standard in Japan during the prewar period. Michael has studied in Japan and worked as an English teacher for Aeon Corporation in Nagano and as an intern at the Sasakawa Peace Foundation USA. He graduated magna cum laude from New York University with a bachelor’s in linguistics in 2014.

Learn More

The CNAS Sanctions by the Numbers series offers comprehensive analysis and graphical visualization of major patterns, changes, and developments in U.S. sanctions policy and economic statecraft. Members of the CNAS Energy, Economics, and Security Program collect and analyze data from publicly available government sources, such as the Treasury Department’s Office of Foreign Assets Control and the Department of Commerce’s Bureau of Industry and Security.