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Export Control Intelligence

AI WEAPONS SANCTIONS & EXPORT CONTROLS

The definitive tracker for US chip export controls, entity list designations, drone component restrictions, arms embargoes, and investment bans shaping the global AI weapons race.

700+
Entities on BIS List
$12B+
NVIDIA Annual Revenue Impact
4
Major Export Control Updates
EO 14105
US Investment Ban Active
Chip Controls Entity List Drone Components Embargo Map Investment Bans Compliance Guide
Section 01

US Chip Export Controls

Four escalating rounds of semiconductor restrictions have progressively cut off China's access to high-end AI compute — reshaping global military AI development and NVIDIA's balance sheet.

October 2022
Initial BIS Rules — First Wave
The Bureau of Industry and Security (BIS) issued sweeping restrictions under the Export Administration Regulations (EAR). NVIDIA's A100 and H100 GPUs — and AMD's MI250 — were restricted from export to China and Russia above performance thresholds (600 TOPS, 300 GB/s bandwidth). Required licenses effectively blocked direct sales to Chinese AI labs and military-adjacent entities. NVIDIA estimated $400M in near-term revenue impact.
October 2023
Expanded Controls — Closing the A800/H800 Loophole
China-spec chips designed specifically to skirt the 2022 thresholds — the NVIDIA A800 and H800 — were added to the restricted list. New performance density thresholds were introduced to prevent future workarounds. The rule also extended coverage to additional countries including countries in the Gulf and Southeast Asia that had emerged as transshipment hubs. Updated Entity List added 27 Chinese organizations including semiconductor firms and AI companies with military links.
2024
Further Tightening — H20 Restrictions & Country Tiers
BIS introduced a three-tier country classification system. Tier 3 countries (including China) face near-total bans on advanced AI chips. NVIDIA's H20 — its last compliant China-market data center GPU — was placed under license requirements in early 2024, then formally restricted. AMD's MI300 series and Intel Gaudi 3 also caught in the net. NVIDIA forecast $5.5B write-down on H20 inventory. Total annual revenue impact exceeded $12B.
2025
AI Diffusion Rule — Global Architecture
The "AI Diffusion Rule" created a global framework: Tier 1 (close allies — no restrictions), Tier 2 (most of world — compute caps apply), Tier 3 (China, Russia, Iran, others — effective ban). US cloud providers required to implement Know-Your-Customer controls for foreign AI training runs. Chip smuggling investigations intensified; Singapore, Malaysia, and UAE flagged as primary transshipment vectors.
2026 — Current State
Status Quo: Who Can Export What, Where
As of 2026, no NVIDIA data center GPU above A10/L4 performance can be exported to China without a license (effectively unobtainable for military-adjacent buyers). TSMC has been deputized to block Chinese customers from advanced nodes. Huawei's Ascend 910B/C represents China's best domestic alternative at roughly 60-70% of H100 performance. Domestic Chinese AI chip output remains insufficient for frontier military AI training runs.

Current Chip Export Status — China

H100 / H200
NVIDIA — Hopper Architecture
Banned
Restricted since Oct 2022 initial rule. Top-performing data center GPU. Primary driver of US AI lead.
A100
NVIDIA — Ampere Architecture
Banned
First chip restricted in Oct 2022. Still widely sought in China through gray markets. Smuggled units estimated in thousands.
A800 / H800
NVIDIA — China-spec Variants
Banned
Designed to skirt 2022 thresholds. Loophole closed October 2023. Chinese AI firms had stockpiled prior to restriction.
H20
NVIDIA — Reduced-spec China GPU
Banned
Last compliant China data center GPU. Restricted 2024. $5.5B write-down for NVIDIA. DeepSeek trained on H20 stockpiles before restriction.
B200 / GB200
NVIDIA — Blackwell Architecture
Banned
Next-generation platform. Never available to China. Tier 1 allies only. 30x inference performance over H100.
MI300X / MI325X
AMD — CDNA Architecture
Banned
AMD's flagship AI accelerator. Covered under same performance density thresholds. No China export license pathway.
Gaudi 3
Intel — AI Accelerator
Banned
Intel's data center AI chip caught in 2024 expanded controls. Gaudi 2 had been sold to China prior to restrictions.
L40S / A10
NVIDIA — Inference GPUs
Restricted
Lower-tier data center inference chips. Subject to end-user review and license requirements. Some exports permitted to verified non-military buyers.
RTX 4090 (consumer)
NVIDIA — Consumer GPU
Restricted
Consumer gaming card used for AI training. Aggregate exports monitored. Chinese buyers circumventing via Hong Kong electronics markets.
Ascend 910B/C
Huawei — Domestic Alternative
Domestic Only
China's best domestic chip. ~60-70% H100 performance. SMIC 7nm equivalent process. Cannot be exported to third countries due to ITAR-adjacent concerns.
A30 / T4
NVIDIA — Older Data Center
Generally Allowed
Older-generation chips below performance thresholds. Export generally permitted with standard EAR controls. Insufficient for frontier AI training.
TSMC N3/N5 Node
TSMC — Foundry Services
Banned for China Military
TSMC required to screen customers for military-linked Chinese entities. Advanced node access blocked for flagged Chinese fabless designers.
Chinese Military AI Impact
China's PLA AI programs have been significantly constrained. Training frontier models requires compute clusters infeasible with domestic chips alone. Pre-restriction stockpiles of A100/H100 were estimated at 100,000+ units — providing a 2-3 year buffer now largely exhausted. The PLA's Military-Civil Fusion strategy increasingly relies on Huawei Ascend clusters and distributed training workarounds.
Smuggling Networks
BIS and DOJ have documented transshipment through Singapore, Malaysia, and the UAE. Chips are exported legally to front companies in these countries, then re-exported to China. In 2024, DOJ charged multiple individuals for exporting NVIDIA A100s via shell companies. Singapore tightened re-export controls under US pressure. Malaysia and UAE remain active vectors with enforcement gaps.
NVIDIA Compliance Position
NVIDIA has publicly supported US export controls while lobbying against the broadest restrictions. The company has lost $12B+ annually in China data center revenue. CEO Jensen Huang has called the restrictions counterproductive, arguing they accelerate Chinese domestic chip development. NVIDIA has invested heavily in compliance infrastructure and KYC processes to avoid enforcement actions.
Section 02

Entity List — AI Weapons Companies

Companies on the BIS Entity List, OFAC SDN List, NS-CMIC List, and other restriction regimes involved in AI weapons development. Export license requirements apply; licenses are generally denied.

12
Chinese Entities Listed
4
Russian Entities Listed
2
Iranian Entities Listed
700+
Total Global Entities
Filter: Type:
Huawei Technologies
China
Entity List NS-CMIC
Listed: May 2019
Parent: Huawei Group
Alleged violations of Iran sanctions and providing equipment to surveil Uyghur population. Primary telecom infrastructure provider to Chinese military. HiSilicon chip division designs AI processors for PLA applications.
Impact: Cut off from US semiconductor technology. Forced to develop Kirin/Ascend chips in-house via SMIC. Smartphone business recovered via domestic ecosystem; data center AI ambitions remain constrained.
SMIC
China
Entity List NS-CMIC
Listed: Dec 2020
Sector: Semiconductor Fab
Semiconductor Manufacturing International Corp — China's largest chipmaker. Listed for risk of diverting US technology to Chinese military-industrial complex. Produces Huawei Ascend chips and PLA-linked fabless designers' chips.
Impact: Blocked from receiving advanced EUV lithography equipment. Stuck at 7nm equivalent; cannot reach 3nm required for frontier AI chips. ASML EUV sales blocked under US pressure on Netherlands.
CETC
China
Entity List
Listed: Oct 2019
Sector: Defense Electronics
China Electronics Technology Group Corporation — state-owned defense conglomerate. Develops radar, electronic warfare, and AI-enabled surveillance systems for the PLA. Directly subordinate to SASAC.
Impact: Restricted from purchasing US components for radar and EW systems. Increasingly relies on domestic semiconductor supply chain and European components via gray markets.
SenseTime
China
Entity List NS-CMIC
Listed: Oct 2019
Sector: Computer Vision / AI
AI facial recognition company providing mass surveillance technology used against Uyghur population in Xinjiang. SenseTime's military-grade computer vision is used in autonomous weapons targeting and reconnaissance systems.
Impact: US investors banned from holding shares (NS-CMIC). IPO on Hong Kong exchange proceeds. Cut off from US cloud computing services and GPU supply for new model training.
Megvii (Face++)
China
Entity List NS-CMIC
Listed: Oct 2019
Sector: AI / Facial Recognition
Facial recognition AI company. Technology deployed in Xinjiang surveillance grid. Defense applications include target identification and biometric tracking for PLA intelligence operations.
Impact: IPO plans derailed by listing. US VC firms unable to make new investments. Company pivoted to industrial robotics and logistics AI to diversify from government surveillance revenue.
iFlytek
China
Entity List NS-CMIC
Listed: Oct 2019
Sector: Speech AI / NLP
AI voice and language technology company. Products used in Xinjiang surveillance for Uyghur dialect recognition. PLA applications include voice recognition for intelligence analysis and command-and-control systems.
Impact: Government contracts remain robust domestically. Cut off from US cloud AI services and speech dataset providers. Developed domestic LLM (Spark) as alternative to GPT-based systems.
Hikvision
China
Entity List NS-CMIC FCC Banned
Listed: Oct 2019
Sector: Video Surveillance
World's largest video surveillance manufacturer, majority state-owned. AI-enabled cameras deployed in Xinjiang detention facilities. Products banned from US federal government procurement. Military AI applications include battlefield surveillance and target tracking.
Impact: Banned from US federal networks. FCC authorization revoked. Still commercially dominant globally. UK, EU, and Australia partially restricting government use of Hikvision equipment.
DJI
China
DoD Restricted FCC Concerns
Listed: Aug 2022 (DoD)
Sector: Consumer/Military Drones
World's largest consumer drone maker (~70% global market share). DoD "Chinese Military Company" list designation for providing drones used by PLA for reconnaissance training. DJI drones widely used by both sides in Ukraine conflict.
Impact: US military and federal agencies banned from procurement. Not on full Entity List — commercial sales continue in US. Separate NDAA Section 848 prohibitions apply to federal use. Company contested DoD listing.
AVIC
China
Entity List NS-CMIC
Listed: Multiple dates
Sector: Aviation / Aerospace
Aviation Industry Corporation of China — state-owned aerospace and defense conglomerate. Develops J-20 stealth fighter, WZ-7 reconnaissance drone, and AI-enabled combat aircraft systems. Direct PLA supplier.
Impact: Subsidiaries individually listed. Blocked from US aerospace technology and components. Forces reliance on Russian jet engines and domestic development, creating program delays in next-gen AI fighter programs.
CASC / CASIC
China
Entity List NS-CMIC
Listed: Multiple dates
Sector: Rockets / Missiles
China Aerospace Science and Technology Corp and China Aerospace Science and Industry Corp — primary missile and rocket manufacturers. Develop AI-guided cruise missiles, hypersonic glide vehicles, and autonomous drone swarms for PLA Rocket Force.
Impact: Cannot acquire US guidance systems, propulsion technology, or AI chip components through direct channels. Active smuggling investigations targeting CASC procurement networks.
Norinco
China
Entity List OFAC NS-CMIC
Listed: 2003 (OFAC), 2020 (CMIC)
Sector: Ground Weapons / Land Systems
China North Industries Group — primary manufacturer of PLA ground combat systems. Produces AI-enabled tanks, autonomous ground vehicles, and anti-drone systems. OFAC listed for Iran missile proliferation. One of world's largest defense conglomerates by revenue.
Impact: US persons banned from transactions. No direct technology import pathway. Independently develops AI fire control and autonomous targeting systems leveraging domestic chip supply.
Rostec
Russia
Entity List OFAC
Listed: Feb 2022
Sector: Defense Conglomerate
Russia's state-owned defense conglomerate — over 700 subsidiaries including Kalashnikov, United Aircraft Corp, and helicopter manufacturers. Oversees production of Orion and Okhotnik drones, and AI-enabled weapons systems deployed in Ukraine. Under full OFAC blocking sanctions.
Impact: Full blocking sanctions freeze all US-touchable assets. Company circumvents via third-country procurement. Iranian and North Korean components increasingly substituted for Western parts. Still producing at high volume due to war footing.
Kalashnikov — Drone Division
Russia
Entity List OFAC
Listed: 2022
Sector: Loitering Munitions
Kalashnikov Concern's UAV division develops the KUB-BLA and Lantset loitering munitions — precursor to the Zala Aero spinout. AI-enabled terminal guidance for point targets. Used in Ukraine against armored vehicles and field positions.
Impact: Full blocking sanctions. US and Western components in recovered munitions indicate persistent procurement via third-country intermediaries including Serbia and Turkey. Continued production at Izhevsk facilities.
Kronshtadt Group
Russia
Entity List OFAC
Listed: 2022
Sector: MALE Drones
Develops the Orion MALE (Medium Altitude Long Endurance) drone — Russia's primary armed reconnaissance UAV. AI-enabled reconnaissance and strike capabilities. Orion used in Syria and Ukraine. Perceived as Russia's Predator equivalent.
Impact: Program slowed by Western electronics restrictions. Engine sourcing from Western suppliers cut off; pivoting to domestic turboprop. AI targeting systems constrained by GPU access limitations.
Zala Aero Group
Russia
Entity List OFAC
Listed: Feb 2022
Sector: Loitering Munitions
Kalashnikov subsidiary — produces the Lancet loitering munition, Russia's most effective AI-guided drone in Ukraine. Electro-optical and IR terminal guidance enables precision strikes on armored vehicles, artillery, and air defense systems. Over 1,000+ confirmed kills in Ukraine conflict.
Impact: Heavily sanctioned but production continues. Forensic analysis of recovered Lancets reveals Sony and Texas Instruments components via gray markets. EU and US investigating procurement networks through Armenia and UAE.
IRGC Procurement Network
Iran
OFAC SDN Entity List
Listed: Multiple — 2007+
Sector: Defense Procurement
Islamic Revolutionary Guard Corps and its aerospace division procure Western components through front companies in Turkey, UAE, and China for Shahed drone and ballistic missile programs. AI guidance systems, MEMS IMUs, and signal processors regularly found in recovered Iranian munitions.
Impact: Extensive OFAC SDN network blocks US financial system access. Iran successfully circumvents via crypto payments and non-USD transactions. Drone production increased despite restrictions — over 2,000 Shaheds provided to Russia for Ukraine.
Shahed Aviation Industries
Iran
OFAC SDN Entity List
Listed: 2019
Sector: Loitering Munitions
Produces the Shahed-136/131 loitering munitions and Shahed-149 Gaza MALE drone. Shahed-136 "kamikaze drones" exported to Russia in large numbers for Ukraine strikes. Programs include AI-enabled terminal guidance and swarm coordination research.
Impact: Sanctioned but domestically insulated. Production facilities located inside fortified IRGC complexes. Exports to Russia, Houthis, and Hezbollah continue despite UN arms embargo on Iran. Estimated production: 300+ units per month.
Munitions Industry Dept.
N. Korea
OFAC SDN Entity List
Listed: 2010
Sector: Defense Industry
Korean Workers' Party organ overseeing DPRK weapons development. Suspected of developing AI-guided missile guidance systems. Kamikaze drone programs modeled on Iranian Shahed design. Provides artillery to Russia. Under full UN arms embargo.
Impact: Hardest-sanctioned defense entity globally. North Korea circumvents via state-controlled cyber operations and Chinese gray market. Ballistic missile tests continue regardless. AI guidance capabilities limited by chip access.
Myanmar Military (Tatmadaw)
Myanmar
OFAC SDN Entity List
Listed: Feb 2021 (coup)
Sector: Military Junta
Myanmar Armed Forces and Military Economic Holdings — sanctioned following February 2021 coup. Uses surveillance drones and AI-enabled monitoring for counter-insurgency. Acquires weapons from China and Russia in violation of US and EU embargoes. AI surveillance systems used against ethnic minorities.
Impact: Arms embargo has limited Western technology access. China and Russia continue supplying. Junta deployed Chinese surveillance AI platforms against pro-democracy forces. Domestic AI weapons capability remains limited.
Section 03

Drone Component Controls

Export restrictions on dual-use drone technology — from Wassenaar-controlled inertial sensors to ITAR-restricted electro-optical systems. The component layer is where most enforcement happens.

Wassenaar Arrangement
The 42-nation Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies (WA) controls drone technology through its Military Items List (ML) and Dual-Use List. Category ML10 covers military UAVs; Category 9E003 covers aerospace technical data. Wassenaar is non-binding — implementation varies widely by participating state.
MTCR Categories
The Missile Technology Control Regime (MTCR) is the primary multilateral framework. Category I covers complete systems (range >300km, payload >500kg) — exports presumptively denied. Category II covers components and subsystems — case-by-case review. Armed MALE drones like Predator/Reaper fall in Category I; smaller tactical systems in Category II. 35 member states.
DJI vs. Baykar
DJI is banned from US military procurement but commercially dominant globally. Turkey's Baykar TB2 bypasses MTCR restrictions by staying below Category I thresholds (400km range, 55kg payload). The TB2's success — Ukraine, Azerbaijan, Ethiopia — demonstrates that export control gaps in sub-threshold armed systems remain a critical policy vulnerability. Baykar now supplying over 30 countries.
Component Control Regime Classification Notes Status
Inertial Measurement Units (IMU) EAR / ITAR / WA ECCN 7A003 High-precision IMUs (accuracy <10 deg/hr) require export license. Used in autonomous navigation and GPS-denied operations. Widely found in recovered Iranian Shahed drones. Restricted
FLIR / Electro-Optical Sensors ITAR / EAR USML Cat XII Thermal imaging sensors for target acquisition. Full ITAR control for military-grade. Dual-use commercial sensors in EAR. Critical for autonomous targeting and ISR payloads. ITAR Controlled
Military-grade GPS Modules EAR / ITAR ECCN 7A994 / USML XIV Encrypted GPS/GNSS receivers for precision navigation. Commercial GPS freely exported; military-grade encrypted units controlled. Adversaries use Russian GLONASS and Chinese BeiDou alternatives. Restricted
Flight Controllers (mil-spec) EAR ECCN 7D003 Autopilot systems capable of autonomous flight profiles. Open-source platforms (ArduPilot, PX4) widely used by adversaries. Military-hardened versions with anti-jam and autonomous engagement modes restricted. Restricted
AI Inference Chips (Edge) EAR ECCN 3A090 Nvidia Jetson, Qualcomm SDC, and similar edge AI processors used for onboard target recognition. Subject to same performance threshold controls as data center GPUs when intended for military use. Restricted
Turbine Engines (MALE class) ITAR / MTCR Cat I USML IV Gas turbine engines powering long-range armed drones. Full ITAR control. Major bottleneck for adversary MALE drone programs — forces use of less capable piston engines or acquisition from Russia/China. ITAR Controlled
Satellite Communication Modems EAR / ITAR ECCN 5A001 SATCOM terminals enabling beyond-line-of-sight drone control. Critical for MALE/HALE drone operations. Starlink terminals have been found on Ukrainian and Russian front-line drones — highlighting commercial SATCOM control challenges. Restricted
Electronic Warfare Payloads ITAR USML XI Jamming, spoofing, and SIGINT systems for drone-mounted EW. Full ITAR control. Russia and China develop independently; Iran acquires via IRGC procurement networks using third-country front companies. ITAR Controlled
Commercial Drone Components (DJI) FCC / DoD NDAA Sec. 848 DJI drones banned from US federal procurement under NDAA. Commercial sale in US continues. Both Ukraine and Russia use DJI Mavics for frontline reconnaissance — DJI refused to limit geofencing in conflict zones, later reversed under pressure. DoD Banned
Policy Gap — Sub-Threshold Armed Drones MTCR Category I thresholds (300km range / 500kg payload) were set in 1987 to address ballistic missiles, not precision armed loitering munitions. The Turkish TB2, Iranian Shahed-136, and Russian Lancet all operate below Category I thresholds while delivering strategic military effect. The regime has not been updated to address the democratization of armed drone technology. Industry advocates argue that tightening sub-threshold controls would harm US allied exports without reducing adversary capabilities.
Section 04

Arms Embargo Map

Multilateral and unilateral arms embargoes targeting AI weapons recipients. Effectiveness varies enormously — UN embargoes with no enforcement mechanism typically fail; targeted financial sanctions have greater impact.

North Korea
Partially Effective
UN UNSCR 1718 (2006), 1874 (2009), 2087 (2013), 2270 (2016) — comprehensive arms embargo. All weapons and dual-use items prohibited.
US EAR comprehensive restrictions, OFAC full blocking sanctions on DPRK entities. No license exception pathway.
EU Full arms embargo and asset freeze. Implementing UN resolutions plus additional autonomous EU measures.
Iran
Partially Effective
UN UNSCR 2231 (2015) — JCPOA framework. Conventional arms embargo expired Oct 2020 per deal terms despite US objections. Missile-related controls remain.
US Comprehensive OFAC sanctions since 1979. All US persons and entities prohibited from weapons transactions. Maximum Pressure policy re-imposed 2018.
EU Arms embargo re-imposed 2022 following Iranian drone supply to Russia. Asset freezes on IRGC leadership and drone manufacturers.
Russia
Partially Effective
UN No UN embargo — Russia holds UNSC veto. UN resolutions blocked. No multilateral UN-level arms restriction possible.
US EAR/ITAR restrictions since 2014 Crimea annexation, massively expanded Feb 2022. Export privileges revoked. Full blocking sanctions on Rostec, Sberbank, VTB, and 1,000+ entities.
EU Arms embargo since 2014, greatly expanded 2022. 14 rounds of EU sanctions covering 2,000+ individuals and entities. Dual-use technology restrictions in all sanction packages.
China
Largely Failing
UN No UN embargo — China holds UNSC veto. Immune from UN-level conventional arms restrictions.
US No comprehensive US arms embargo. Entity List and NS-CMIC designations apply to specific companies. Chip export controls are primary lever. ITAR prohibits US defense articles to PLA.
EU Arms embargo since 1989 Tiananmen — never legally lifted. Politically maintained but industrially porous. France, Germany maintain significant dual-use technology sales.
Myanmar
Largely Failing
UN Non-binding UN resolutions calling for arms embargo. China and Russia blocked binding UNSC action. Regional ASEAN states oppose extraterritorial sanctions framework.
US EO 14014 blocking sanctions on military entities post-2021 coup. Arms sales prohibited. OFAC SDN listings for junta leadership. Limited practical impact given China/Russia supply.
EU Arms embargo, asset freeze, travel bans. EU Regulation 2021/796 targets defense minister, military procurement officials, and Myanmar Economic Holdings Ltd.
Belarus
Partially Effective
UN No UN-level embargo. Belarus not subject to UNSC arms restrictions.
US EAR restrictions expanded 2022. Belarus-Russia dual-use tech controls coordinated to prevent Russian circumvention through Belarusian entities. OFAC sanctions on Lukashenko regime.
EU Arms embargo since 2020 (Lukashenko re-election fraud). Included in Russia sanction packages as primary transshipment route for restricted goods. 7 packages of EU sanctions.
Section 05

Investment Restrictions

Beyond export controls, the US has moved to block capital flows into Chinese military AI through executive orders and CFIUS — recognizing that foreign investment accelerates adversary capabilities.

Executive Order 14105
Addressing US Investments in Certain National Security Technologies and Products in Countries of Concern
Signed August 9, 2023. Effective January 2024. Prohibits US persons from investing in Chinese companies engaged in semiconductors and microelectronics, quantum information technologies, and AI systems with military, government intelligence, or mass surveillance applications. Requires notification for certain non-prohibited transactions. Administered by Treasury's OFAC with Commerce support. Covers both direct investments and indirect holdings through funds.
Affected Companies
Companies affected by EO 14105 AI provisions include SenseTime, Megvii, iFlytek, Hikvision, SMIC, Huawei, and any Chinese company developing AI with plausible military, government intelligence, or surveillance use. Treasury's final rule (January 2024) focuses on training AI models for military targeting, weapons design, command-and-control, or population surveillance at scale. Ambiguity in definitions has created compliance uncertainty for VC and PE funds with diversified China portfolios.
VC / PE Impact
US venture capital firms including Sequoia Capital, GGV Capital, and several others have spun off their China-focused funds in anticipation of EO restrictions. Chinese AI defense tech investment from US sources has dropped over 90% since 2022 as a combination of geopolitical risk, Entity List exposure, and EO compliance burden make deals unattractive. Chinese AI companies have pivoted to domestic, Middle Eastern, and Southeast Asian investor bases.
CFIUS — Defense AI Acquisitions
The Committee on Foreign Investment in the United States (CFIUS) has become significantly more aggressive on defense AI. Mandatory filing required for all TID (Technology, Infrastructure, Data) US business transactions involving foreign government-linked investors. CFIUS blocked and unwound multiple acquisitions of US AI companies with defense adjacency. Chinese acquirers are effectively barred from US defense AI M&A. Even passive investments above 1% in sensitive AI companies now trigger review.
Company Restriction Type Basis Compliance Status
SenseTime NS-CMIC / EO 14105 Military AI, Xinjiang surveillance US investors divested; HK-listed. No new US investment permitted.
Megvii NS-CMIC / EO 14105 Military AI, Xinjiang surveillance Canceled NYSE IPO. Private company. US investors exited positions.
CASIA (CASIA AI) EO 14105 Military AI research institute link Under review. US LP exposure in China funds being assessed.
CloudWalk Entity List / EO 14105 Xinjiang surveillance AI Listed on Shanghai STAR Market. No actionable US investment pathway.
Hikvision NS-CMIC / EO 14105 Military surveillance AI US institutional investors required to divest under NS-CMIC rules. Ongoing compliance enforcement.
Section 06

Compliance Guide

A practical reference for defense industry professionals navigating the ITAR/EAR framework. Violations carry severe criminal and civil penalties. When in doubt, seek qualified export counsel before proceeding.

ITAR — International Traffic in Arms Regulations
ITAR (22 CFR Parts 120-130) controls defense articles, defense services, and related technical data on the US Munitions List (USML). Administered by the State Department's Directorate of Defense Trade Controls (DDTC).
  • Applies to any item specifically designed for military/defense application
  • Covers hardware, software, source code, and technical data
  • Any transfer to a foreign person (including in the US) requires authorization
  • Registration with DDTC required for all manufacturers and exporters
  • No license exceptions for USML items to embargoed countries
  • Criminal penalty: up to $1M per violation, 20 years imprisonment
EAR — Export Administration Regulations
EAR (15 CFR Parts 730-774) controls dual-use items on the Commerce Control List (CCL). Administered by Commerce Department's Bureau of Industry and Security (BIS).
  • Applies to commercial items with potential military applications
  • Items classified by Export Control Classification Number (ECCN)
  • Reason for control determines license requirements by country
  • AI chips fall under ECCN 3A090 (performance thresholds apply)
  • License exceptions available for many items to allied countries
  • Civil penalty: up to $364,992 per violation; criminal: up to $1M, 20 yrs
How to Check the Entity List
Before any export, re-export, or in-country transfer, screen all parties against the consolidated lists. Free government tools available.
  • BIS Consolidated Screening List: export.gov/csl-search
  • OFAC SDN List: ofac.treas.gov/SDN
  • Commerce Entity List updated in Federal Register
  • Screen: consignee, end-user, intermediaries, and freight forwarders
  • Screen by name AND address — aliases and transliterations common
  • Document all screens with date/version of list used
Deemed Export Rules
A "deemed export" occurs when controlled technology or source code is released to a foreign national in the United States — treated the same as an export to their home country.
  • Applies to visual inspection, technical briefings, and lab access
  • Chinese, Russian, Iranian nationals in US labs: license may be required
  • Green card holders are generally not subject to deemed export rules
  • AI model weights and training code are covered technical data
  • University fundamental research exemption (FRE) may apply for basic research
  • Proprietary company R&D not protected by FRE — assess each project
Penalties for Violations
Export control violations — whether intentional or administrative — carry severe consequences. The government has significantly increased enforcement resources since 2022.
  • Criminal: up to 20 years imprisonment per ITAR/EAR count
  • Criminal fines: up to $1M per violation (both regimes)
  • Civil fines: up to $1.3M per ITAR violation, $364K per EAR violation
  • Denial of export privileges: effectively bans from US commerce
  • Debarment from US government contracts
  • Voluntary self-disclosure can significantly reduce penalties
Compliance Program Essentials
A strong export compliance program (ECP) is the primary defense against enforcement actions and provides mitigation credit if violations occur.
  • Written Export Compliance Manual covering ITAR and EAR obligations
  • Designated Export Compliance Officer with C-suite reporting line
  • Mandatory training for all employees with technology access
  • Automated screening of all parties in every transaction
  • Technology Control Plans for ITAR-controlled R&D projects
  • Voluntary self-disclosure protocol for discovered violations
  • Annual compliance audit by outside export counsel
Disclaimer This compliance overview is for informational purposes only and does not constitute legal advice. Export control regulations are complex, frequently updated, and fact-specific. Companies and individuals involved in defense technology exports should retain qualified export control counsel and review all transactions against current regulatory text. The regulatory landscape covered above was accurate as of publication but may have changed.

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