US adds 33 Chinese firms to red flag list

Published February 8, 2022
The American and Chinese flags wave at Genting Snow Park ahead of the 2022 Winter Olympics in Zhangjiakou, China, Feb 2. — AP
The American and Chinese flags wave at Genting Snow Park ahead of the 2022 Winter Olympics in Zhangjiakou, China, Feb 2. — AP

WASHINGTON: The Biden administration is raising red flags about 33 Chinese companies whose legitimacy it cannot verify, imposing new restrictions on their ability to receive shipments from US exporters and requiring extra diligence from American companies that want to do business with them.

The Commerce Department said on Monday that it was adding the companies to what is known as the Unverified List, a roster of businesses worldwide that are subjected to stricter export control because US officials have been unable to do customary checks.

The ability to verify the legitimacy and reliability of foreign parties receiving US exports through the timely completion of end-use checks is a core principle of our export control system, Matthew Axelrod, the department’s assistant secretary for export enforcement, said in a statement.

He added that the addition of 33 parties in the Peoples Republic of China to the Unverified List will assist US exporters in conducting due diligence and assessing transaction risk, and signal to the PRC government the importance of their cooperation in scheduling end-use checks.

The announcement comes as Beijing occupies the world’s attention by hosting the Winter Games. And it follows a speech last week from FBI Director Christopher Wray in which he said the bureau was opening investigations related to Chinese intelligence operations about every 12 hours and warned that there was no country that presents a broader threat to our ideas, innovation and economic security than China.

China has repeatedly rejected accusations from the US government, saying Washington has made groundless attacks and malicious smears.

The Commerce Department’s action puts US exporters on notice that they will now need a license if they want to ship products to any of the companies on the list. It alerts the flagged companies that they must certify that they are legitimate and willing to comply with US regulations to continue receiving shipments.

And the move is meant to advise China that it must permit US checks and inspections of the companies if it wants them to come off the list.

The Commerce Department conducts checks of some foreign companies, or “end-users,” that receive shipments from inside the US to ensure that the companies exist and are legitimate businesses and that the products are being used for the stated purposes. That’s especially a concern in China, where products seemingly meant for commercial use wind up diverted for military purposes.

The checks are typically coordinated with the Chinese government. When the US is unable to conduct a check, or unable to verify a company’s legitimacy, the company can then be added to the Unverified List. It can come off the list by agreeing to a check and establishing that it is a legitimate business.

Most of the companies flagged are electronics businesses, but they also include optics companies, a turbine blade company, state laboratories at universities and other businesses.

The addition of the 33 Chinese companies brings the total number of listed entities to roughly 175. Other nations with companies on the Unverified List include Russia and the United Arab Emirates.

Published in Dawn, February 8th, 2022

Opinion

Editorial

Security lapses
Updated 13 Apr, 2024

Security lapses

Ensuring the safety of foreign citizens is paramount, not just for diplomatic relations but for our economic future.
An eventful season
13 Apr, 2024

An eventful season

THE Senate chairman and deputy chairman were elected unopposed, and 41 new senators were sworn in on Tuesday,...
Living rough
13 Apr, 2024

Living rough

WE either don’t see them or don’t want to see them — not even when they are actively trying to get our...
Saudi investment
Updated 10 Apr, 2024

Saudi investment

The state has to address barriers that stand in the way of attracting foreign investment, and create a pro-business environment.
Charity for change
Updated 11 Apr, 2024

Charity for change

PAKISTANIS are large-hearted people who empty their pockets at the slightest hint of another’s need. The Stanford...