MORNSUN GUANGZHOU SCIENCE AND TECHNOLOGY CO LTD (MORNSUN) is a PRC-based supplier of Tier 1 and Tier 3.A items on the BIS Common High Priority List to Russia-based end users. Items MORNSUN has supplied include electronic integral monolithic circuits. One of the Russia-based companies that received components from MORNSUN was identified as a supplier to a Russia-based entity that specializes in the production and marketing of airborne equipment for military aircraft, such as airborne weapons control radars for Russian fighter aircraft.
Which could just mean "Some Mornsun devices were found inside a crashed Russian drone. Alongside parts from a who's-who of US manufacturers, but we'll pretend we didn't see those".
US companies are legally required to at least make an effort to prevent their exports from ending up in hands they aren't supposed to, and they will keep a paper trail to demonstrate compliance with those requirements. Hence the threads you occasionally see here complaining about Digikey or Mouser requiring additional paperwork from, or even denying sales outright to people in other countries. So it's a lot easier for them to at least make the argument that they did their best, and they have plenty of properly-completed forms to prove it. I doubt that Mornsun is in the same position.
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IANAL, but I would interpret that to mean that anything owned by the embargoed company cannot be traded. But if it was already sold to a distributor, it is no longer the property of the embargoed company. So it really depends on whether the distributor purchased and paid for goods (i.e. distributor has full ownership) or whether they have the goods on consignment (manufacturer has ownership).
IANAL either, but this is my interpretation as well. The target is the assets of the sanctioned entity, not their products. One of the hints here is that the sanctions are administered by the Office of Foreign Asset Control, not the Department of Commerce (which administers general commercial import/export controls) or Department of State (which administers import/export controls for 'munitions', which really means anything with military implications).
One of our overseas suppliers recently started using Mornsun PSUs in an assembly they produce for us. We'll ask them to use a different supplier going forward to be on the safe side, but it's not clear to me if that's even necessary, since they're no longer Mornsun's "property" once they get to us. I've asked a federal contact who's helped us navigate export controls in the past for guidance, will hopefully hear back on Monday.
As an aside for anyone in the US who's having trouble navigating export requirements: get in touch with your local
US Commercial Service office, they have teams of people who are paid to help you deal with those things, and if they don't know the answer they can connect you to the people who do.