Multiple Companies Disclose Receiving BIS Orders to Halt China Exports
At least three companies last week disclosed receiving letters from the Bureau of Industry and Security informing them of new license restrictions they must follow for certain exports to China, including two semiconductor design firms and one oil company.
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Electronic design automation companies Synopsis and Cadence, along with gas and oil pipeline company Enterprise Products Partners, all said they received is-informed letters from BIS, part of an ongoing effort by the agency to restrict a broad range of shipments that it believes are of strategic significance to China (see 2505290038)
Synopsys suspended its financial outlook and guidance last week after receiving the letter, the company said in an SEC filing. Synopsis said it was suspending its guidance for the third quarter and the full 2025 fiscal year, which it had issued May 28.
One day later, Synposys said, it received a letter from BIS “informing Synopsys of new export restrictions related to China.” The company is “currently assessing the potential impact of the BIS Letter on its business, operating results and financial condition.”
In an SEC filing released last week, Cadence said it received a letter from BIS on May 23 informing the company that it needs a license to export, re-export or transfer electronic design automation software and technology under Export Control Classification Numbers 3D991 and 3E991 when a party to the transaction is in China or is a Chinese military end user anywhere in the world.
“The letter stated that BIS has determined that these shipments pose an unacceptable risk of use in or diversion to a ‘military end use’ in China or for a Chinese ‘military end user,’” Cadence said. “Robust customer design activity continues to drive strong global business momentum. The new requirements are complex, and we are engaging with BIS to obtain further clarification, as we assess the impact on our business and financial results.”
Enterprise Products Partners, which calls itself one of the leading North American providers of gas, oil and petrochemicals, said it also received a letter from BIS on May 23 informing the company that it needs a license to ship certain items if a party to the transaction is in China or is a Chinese military end user. That includes certain ethane and butane products listed under Harmonized Tariff Schedule code 2901.10.10.
BIS told the company that “such exports, reexports, or transfers (in-country) pose an unacceptable risk of use in or diversion to a ‘military end use’ in China or for a Chinese ‘military end user,’ with a specific concern for their use in China’s military-civil fusion strategy,” the SEC filing said. BIS is requiring Enterprise Products Partners to apply for a “validated license prior” to exporting those items to China or Chinese military end-users, “except for certain eligible license exceptions.”
The company owns and operates marine export terminals that handle natural gas liquids, including ethane and butane products, and it’s “currently evaluating its procedures and internal controls with respect to Covered Ethane and Butane Products and the potential scope of transactions involving such products that may be subject to the requirement to obtain a BIS license,” it said. The company said it can't yet determine whether it will "be able to successfully obtain any required BIS license in a timely manner, or at all, for applicable transactions involving Covered Ethane and Butane Products.”
It also said it’s unclear whether it can turn to alternative markets and how these new restrictions “may indirectly impact U.S. crude oil and natural gas production and prices.”