China’s top sanctioned chipmaker owns a portion of a Chinese chip designer who is buying American software and has financial support from the United States. These links highlight the challenges Washington confronts in enforcing new regulations intended to prevent American funding of Beijing’s semiconductor industry.

Through a review of business statements, regulatory filings, tenders, and academic articles written by researchers and institutes affiliated with the People’s Liberation Army (PLA), Reuters discovered that Brite Semiconductor provides chip design services to at least six Chinese military suppliers.

Its second largest shareholder and top supplier, chipmaker SMIC, was placed on the so-called U.S. entity list over alleged ties to Beijing’s military, effectively barring it from receiving some goods from U.S. suppliers.

Despite those relationships, Brite boasts funding from a U.S. venture capital firm backed by Wells Fargo and a Christian university, and has continued access to sensitive U.S. technology from two California-based software companies, Synopsys and Cadence Design, documents showed. Reuters has found no evidence that Brite’s relationships with U.S. firms violate any regulations.