BIS settles with Coastal PVA over unlicensed exports to SMIC entities in China

WASHINGTON, April 13, 2026 — The U.S. Department of Commerce’s Bureau of Industry and Security issued a final order against Coastal PVA Technology Inc., a Rocklin, California-based manufacturer of polyvinyl alcohol brushes, after the company admitted to 18 violations of the Export Administration Regulations tied to shipments to Semiconductor Manufacturing International (Beijing) Corp. and Semiconductor Manufacturing North China (Beijing) Corp. in China.

According to the order and settlement agreement, Coastal sold and exported brushes and related products valued at about $400,000 between May 2021 and May 2024 through two third-party distributors, with the items ultimately going to SMIC Beijing and SMIC North, both of which were on the BIS Entity List. BIS said a license was required for those exports, reexports or in-country transfers, but Coastal never sought or obtained one. The products were classified as EAR99 and could be used in semiconductor manufacturing to clean post-etched wafers.

BIS said Coastal knew the products were destined for the two SMIC entities and that the violations stemmed in part from inadequate compliance controls. The order states the company had no formal export compliance policies or procedures at the time of the sales and stopped further sales to the two entities after BIS informed it of the licensing requirement.

Under the settlement, BIS imposed a civil penalty of $1.7 million, but suspended the full amount for one year and said it will be waived if Coastal complies with the agreement and commits no further violations during the probationary period. If Coastal fails to comply, the suspended penalty may be activated and become immediately due in full.

The order also requires Coastal personnel handling export compliance to complete export control training within six months and directs the company to complete an internal audit of its export controls within nine months, covering the six months following the order. BIS made completion of the training and audit conditions for the granting, restoration or continuing validity of any export license, license exception, permission or privilege granted to Coastal.