U.S. adds China’s YMTC and 30 other firms to ‘unverified’ trade list

WASHINGTON, Oct 7 (Reuters) – The United States on Friday added major Chinese memory chipmaker YMTC and 30 other Chinese entities to a list of companies that U.S. officials have been unable to inspect, saying which increased tensions with Beijing and launched a 60-day clock. this could result in much harsher penalties.

The new listings were the first in a series of new restrictions announced on Friday on technology exports to China aimed at blocking military advances. The crackdown included restrictions on access to chipmaking tools for Chinese companies, including Yantze Memory Technologies Co (YMTC), as Reuters reported a day earlier. Read more

US senators from both parties have called for YMTC, the fast-growing Chinese chipmaker, to be placed on a commercial blacklist known as the “Entity List”. The company, founded in 2016, poses a “direct threat” to U.S. chip companies, according to the Biden administration.

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The YMTC and the Chinese Embassy in Washington did not respond to requests for comment.

YMTC is under investigation by the Commerce Department over whether it violated U.S. export controls by selling chips to blacklisted Chinese telecommunications company Huawei Technologies Co Ltd. Its chips are also being evaluated by Apple Inc for inclusion in some of its iPhones in China, a major concern. for US lawmakers and the Biden administration.

The companies are added to the unverified list because the United States was unable to conduct on-site visits to determine whether they can be trusted to receive sensitive technology exports from the United States. US inspections of Chinese companies require approval from the Chinese Ministry of Commerce.

U.S. exporters must do additional due diligence before sending goods to entities placed on the “unverified list,” like the 31 added on Friday, and may have to apply for more licenses.

Under the Biden administration’s new policy, if a government prevents U.S. officials from conducting site checks at companies placed on the unverified list, Washington will begin the process to add them to the entity list after 60 days.

Listing the YMTC entity would further escalate tensions with Beijing and force its US suppliers to seek hard-to-obtain licenses from the US government before shipping even the most rudimentary items to them.

Not all of the measures announced on Friday were bad news for China. The United States removed a unit of Wuxi Biologics, maker of ingredients for AstraZeneca’s COVID-19 vaccine, from the unverified list. Reuters reported last summer that US officials were able to conduct an inspection of the Wuxi city site, a stepping stone to delisting.

A Wuxi Biologics spokeswoman said the company was pleased the Wuxi site was delisted, given the inspection in June. The company looks forward to scheduling an inspection of its Shanghai subsidiary, which was also placed on the unverified list in February, she added.

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Reporting by Karen Freifeld; Editing by Chris Gallagher, Chris Sanders, Chizu Nomiyama, Mark Porter and Richard Chang

Our standards: The Thomson Reuters Trust Principles.

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