Matthew Bruzzese
As strategic competition between the United States and the People’s Republic of China (PRC) increases, the US Government has become more vigilant in its attempts to prevent the illegal export of sensitive technology to the PRC. This has included the addition of more PRC institutions to the Bureau of Industry and Security (BIS) Entity List, as well increased enforcement and legal action against individuals found to be violating export control measures (Federal Register, December 19, 2022; see Defense One, June 8, 2021). Despite this, sanctioned PRC entities have continued to find ways to circumvent these measures and acquire the critical foreign technologies they need to advance the PRC’s military modernization. This has included sanctioned PRC defense companies’ use of thinly veiled straw purchasers to acquire needed technology from the United States that would otherwise be off-limits to them. The recent indictment of two PRC nationals attempting to use a front company to purchase critical semiconductor manufacturing equipment on behalf of a blacklisted PRC entity shows that this continues to be a go-to method in the toolkit of any would-be smuggler hoping to circumvent US export control laws (US Department of Justice, April 25; Tencent, April 30).
In October 2022, a report in The Washington Post revealed that US technology was being used to advance the PRC’s hypersonic weapons program (Washington Post, October 17, 2022). The report put a spotlight on PRC use of middlemen, as the technology had apparently found its way from the United States to PRC missile research institutes via straw purchasers offering a very flimsy veneer of plausible deniability about the final destination for this technology.
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