JIRA import fails and hangs. Log error: could not find entity for entityName

When performing an import the JIRA instance hangs and the logs show the following error message:

JiraImportTaskExecutionThread-1 ERROR XXXXX 775x191x1 13ia0t7 0:0:0:0:0:0:0:1 /secure/admin/XmlRestore.jspa [jira.bc.dataimport.DefaultDataImportService] Error importing data: java.lang.IllegalArgumentException: [GenericDelegator.makeValue] could not find entity for entityName: KPlugins
java.lang.IllegalArgumentException: [GenericDelegator.makeValue] could not find entity for entityName: KPlugins

Cause:
The XML export was generated from an instance with some specific third party plugins installed on it.

Behaviour and Workaround explained at Could not find entity for entityName - when restoring a XML backup into a JIRA application

Note:
The JIRA instance shouldn't hang. On OnDemand users are not able to login and see a 500 error message screen until it is manually restarted. No error message is displayed explaining the error.