Addressing the Complexities of BIS Entity List Screening

With rising geopolitical tensions and a complex interweb of global supply chain networks, businesses face more than just traditional financial sanctions in international trade. Among the most significant non-financial regulatory tools is the Bureau of Industry and Security (BIS) Entity List of the U.S. Department of Commerce.

To protect U.S. origin goods, technology, or services from trading with foreign entities that may use those goods to pose a risk to U.S. national Security, the BIS Entity List subjects listed entities to a higher form of scrutiny in terms of trade restrictions and prohibitions.

Understanding what the BIS Entity List is,  how it functions, and its implications is imperative for compliance professionals across financial and non-financial sectors.

What is the BIS Entity List?

The BIS Entity List is a trade restriction mechanism that is maintained by the U.S. Department of Commerce’s Bureau of Industry and Security under the broader umbrella of the Export Administration Regulations (EAR).

The central aim of BIS is to identify foreign individuals, organizations, or entities that are subject to specific license requirements for the export, re-export, and transfer of U.S.-origin goods, ranging from technology to security and other goods.

Essentially, then, in line with the national security and foreign policy of the U.S., the BIS Entity list is to prohibit the export and re-export of dual-use goods (those that can be used for civil or military applications) to entities that act against the interests of the U.S. Government.

However, being named in the BIS Entity List does not constitute a financial sanction. Rather, it imposes an export control barrier that can severely limit the named entities’ access to U.S. technology, security-related items, and goods in general.

“The Entity List identifies persons or addresses of persons reasonably believed to be involved, or to pose a significant risk of being or becoming involved, in activities contrary to the national security or foreign policy interests of the United States.”

Bureau of Industry and Security – U.S. Department of Commerce

Who Is On the U.S. BIS Entity List

Entities on the U.S. BIS Entity List range from companies, organizations, to individuals that pose a security risk to the interests of the U.S. In this sense, Chinese tech companies, Russian defense contractors, and Iranian universities are listed on the BIS Entity list because of their involvement in prohibited nuclear, military, or surveillance activities.

In late 2022,  the U.S. Department of Commerce added Yangtze Memory Technologies Co. Ltd. (YMTC), a Chinese memory chip manufacturer, to the BIS Entity List. This action was taken due to YMTC’s involvement in activities that were contrary to U.S. national security and foreign policy interests, such as its support for the Chinese military and its role in China’s surveillance efforts. As a result, U.S. companies are now required to obtain a license before exporting, re-exporting, or transferring certain items to YMTC.

When an entity is listed on the BIS List, the listing proceeds on a “presumption of denial” basis for any license requests for trade. Essentially, then, licenses are rarely awarded to companies that want to trade U.S. origin items to a foreign entity listed on the BIS List, since it is presumed that by the very fact that the entity is listed on BIS, a license to trade U.S origin goods will not easily be awarded.

Along with each listing on the BIS List is the justification for inclusion and the specific licensing requirements, which can be unique to the location, associated persons, or specific end-use concerns. The list is regularly updated and publicly available on the BIS website.

Reflecting rising geopolitical tensions, businesses from certain countries are consistently listed on the BIS List:

China:

On September 12th, 2025, the US Department of Commerce amended the EAR by adding 23 Chinese entities to the Entity List. The cited justification for including the entities was that the named Chinese businesses attempted to acquire U.S.-origin items to advance China’s military, defence, and militarization of quantum technology against U.S. interests.

Russia:

Following the Russian invasion of Ukraine, the BIS added forty-seven Russian entities to the Entity List for supporting the modernization of the Russian military and defence activities associated with the invasion.

Belarus:

Similarly, after the invasion of Ukraine,  the U.S. Department of Commerce amended the EAR further by adding 24 Belarusian entities to the BIS List for attempting to acquire U.S.-origin items to support Russia’s military invasion in Ukraine.

In summary, the BIS Entity List predominantly includes entities from countries that concern US national security and go against U.S. foreign policy. These listings underscore the importance for exporters to remain vigilant, as any engagement with listed entities without prior approval from the EAR may result in penalties.

What Is The Difference Between Export Control Restrictions?

To regulate U.S. exports, the EAR has several export control restrictions that cater to different requirements. While these export control restrictions vary in severity and the restrictions they impose, every export control measure under the EAR regulates U.S. exports to ensure that sensitive dual-use goods are not used against U.S interests.

Being named on the BIS Entity List has significant implications for entities; it is important to understand how the BIS List differs from other export control restrictions:

1. Unverified List (UVL):

The UVL list includes entities that cannot be verified by the U.S government, thus requiring increased due diligence from exporters.

• Listed entities on the Unverified list are subject to increased scrutiny, but are not outright restricted.
• U.S businesses need to verify transactions before engaging with their unverified entities.
• This is the least severe list as it does not impose outright banks or licensing requirements.

2. BIS Entity List:

The BIS List identifies foreign entities subject to license requirements for U.S exports based on concerns of national security and foreign policy interests.

• Entities require an export license for transactions involving U.S goods or services.
• Exports are still possible with approval from BIS
• Listed Entities can still to dealing  with a U.S business.

3. BIS Denied Persons List:

The Denied Persons List includes entities that are completely prohibited from receiving U.S exports.

• Entities are entirely prohibited from all export transactions with U.S businesses.
• Given the complete prohibition, there is no license to export.
• This is the most severe export control designation.

The BIS administers all three lists, but they vary in their implication. An effective screening solution allows businesses to screen against the relevant list according to their risk exposure.

Why AML Compliance and Risk Teams Should Focus on the BIS Entity List?

Although the BIS Entity List is not a traditional sanction list such as OFAC or the UN Sanctions, it is still important to consider for accurate risk assessments. Many of the listed entities operate globally, and engaging with them may lead to regulatory consequences, reputational risks, or indirect violations of U.S. export control laws.

Financial institutions, exporters, manufacturers, and supply chain operators should consider the BIS Entity List as part of a broader compliance framework, particularly when dealing with high-risk jurisdictions or sensitive technologies. Engaging with listed entities without an appropriate BIS Entity List screening solution can result in:

• Regulatory penalties and fines.
• Reputational risks in markets.
• Denial of licenses for critical exports.

The US Department of Commerce’s BIS imposed a $300 million penalty on Seagate Technology Pvt Ltd for exporting Hard Disk Drives (HDDs) without a license to Huawei Technologies in violation of the BIS Entity List.

By adopting an effective BIS Entity List screening solution into a broader compliance framework, export businesses can trade with listed entities while ensuring compliance with due licenses.

How to Keep Your Business Ready for BIS Entity List Changes

Navigating the complex framework of the BIS Entity List is a challenge for both businesses and financial institutions. U.S exporters are obligated to check that every shipment complies with export controls to avoid substantial fines and license denials.

To make screening against the BIS List efficient, automated screening solutions are important for keeping pace with frequent updates and maintaining compliance across financial and non-financial sectors.

AML Watcher extensive database includes the U.S Consolidated List (of which the Entity List is a part), enabling businesses to instantly identify high-risk entities. Streamline your compliance process with the Entity List, and safeguard operations against inadvertent violations.

The BIS updates its Entity List frequently based on the foreign policy and national security priorities. Particularly for technology, surveillance, and militarization, recent years have seen accelerated listings tied to geopolitical tensions.

A strong compliance posture requires awareness across both financial and non-financial risk indicators.