US adds 13 companies in China to Unverified List

By Karen Freifeld

WASHINGTON (Reuters) -The United States has added 13 companies in China to a list of entities receiving U.S. exports that officials have been unable to inspect, according to a government notice posted on Tuesday.

Companies are placed on the “Unverified List” when U.S. export control officers cannot complete on-site visits to determine whether they can be trusted to receive U.S.-origin technology and other goods. U.S. inspections of Chinese companies require the approval of China’s commerce ministry.

U.S. exporters are required to conduct additional due diligence before sending items to companies on the list, which serves as a red flag, and may have to apply for more licenses.

Additions to the list include PNC Systems in Jiangsu, Beijing Shengbo Xietong Technology, Guangzhou Xinwei Transportation and Plexus in Xiamen.

The list is one tool the U.S. is using to stop sensitive American goods and technology from falling into the wrong hands. It has also issued sweeping restrictions on shipping advanced semiconductors and chip making equipment to China to keep U.S. technology from China’s military modernization. The tech battle has escalated tensions between the countries.

“The United States has been generalizing the concept of national security, adopting discriminatory and unfair practices against specific Chinese companies, and politicizing and weaponizing economic and trade issues,” Liu Pengyu, a spokesperson for the Chinese embassy in Washington, said in a statement after Tuesday’s actions. “The inclusion of Chinese companies in the ‘unverified list’ is another example.”

Under a Biden administration policy, if a foreign government prevents U.S. officials from conducting site checks at companies on the Unverified List, Washington will start the process of adding them to the more restrictive “Entity List” after 60 days.

The U.S. removes companies from the Unverified List after successful checks take place, as it did with four companies on Dec. 15.

Wuxi Biologics, a Chinese maker of ingredients for AstraZeneca’s COVID-19 vaccine, lost nearly $10 billion in market value after two of its units were added to the Unverified List in February 2022.

Months later, after Reuters exclusively reported that Chinese authorities allowed a U.S. inspection of the company facility in Wuxi, the company’s shares jumped over 12%. The facility came off the list that October.

The other companies put on the Unverified List on Tuesday include Beijing Jin Sheng Bo Yue Technology, Fulian Precision Electronics in Tianjin, Guangzhou Xinyun Intelligent Technology, Nanning Fulian Fu Gui Precision Industrial, Ningbo MOOF Trading, Shenzhen Bozhitongda Technologic, Shenzhen Jia Li Chuang Tech Development, Shenzhen Jingelang, and Xi’An Yierda.

(Reporting by Karen Freifeld in New York; Additional reporting by Doina Chiacu in Washington; Editing by Richard Chang and Stephen Coates)