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China’s Leading AI Company Bypassed U.S. Restrictions

SenseTime is a prominent Chinese tech company and an industrial leader in artificial intelligence and facial recognition. In October 2019, the U.S. Commerce Department added SenseTime to its Entity List, which effectively prevents listed entities from obtaining many U.S. tech items. The Department states SenseTime was among a list of Chinese companies that were “implicated in human rights violations and abuses in China’s campaign targeting Uighurs and other predominately Muslim ethnic minorities in the Xinjiang Uighur Autonomous Region.”

In 2020, the Commerce Department’s Bureau of Industry and Security made a subtle tweak to the designation. The company on the Entity List was changed from SenseTime generally to Beijing SenseTime, one of its subsidiaries. As a result, the firm says it can “continue to source” items as long as it doesn’t use its Beijing SenseTime subsidiary.

According to the company, the designation “has not had any material adverse impact on the [parent company’s] business.” It recently told this to potential investors.

Prior to the sanctions, SenseTime was widely referred to as “Beijing SenseTime” and most of the firm’s key patents and trademarks are still owned by Beijing SenseTime while Beijing has the most SenseTime workers listed on LinkedIn.

However, SenseTime’s current ownership chart shows Beijing SenseTime to be an isolated subsidiary. SenseTime’s website no longer lists Beijing SenseTime in its footer, but now lists Shanghai SenseTime.

In April 2019, the New York Times reported  that the company had provided facial recognition software to Chinese authorities who then used the software to monitor Uyghurs in Xinjiang.

Source: IPVM, September 28, 2021
Axios, September 29, 2021