‘Unreasonable suppression’: China protests US export blacklist expansion; demands ‘immediate correction’
The United States implemented stricter controls on Monday targeting firms in China and various nations that employ subsidiary operations to circumvent limitations on semiconductor manufacturing equipment and associated technologies.The Chinese Ministry of Commerce released a statement demanding Washington to “immediately correct its wrongful action” and cease its “unreasonable suppression of Chinese enterprises”.The comes after US on Monday tightened restrictions on companies in China and other countries that use subsidiaries to circumvent existing curbs on chipmaking equipment and other technology. The Commerce Department issued a new rule expanding its restricted export list, known as the Entity List, to automatically include subsidiaries that are 50 percent or more owned by a company already on the list, according to a posting in the US Federal Register.
The move significantly increases the number of companies that require licenses to receive American goods and services. The rule is expected to disrupt supply chains and complicate efforts by companies to determine whether exports to a customer or supplier are restricted.
Certain transactions may still be allowed for 60 days, the posting noted, as reported by Reuters. The affiliates rule is modeled on the Treasury Department’s Office of Foreign Assets Control “50 percent rule” for sanctioned entities.
Under the Commerce Department rule, “If a company is owned 50 percent or more by an entity on the list, licenses will be required for US exporters to ship goods or technology to the subsidiary, just as they are for listed entities, with many licenses likely to be denied.”
