US adds China’s YMTC and 30 other companies to ‘unverified’ trading list

WASHINGTON, Oct. 7 (Reuters) – The United States on Friday added Chinese memory chip maker YMTC and 30 other Chinese entities to a list of companies that US officials have been unable to inspect, escalating tensions with Beijing and setting a 60-day clock. which could lead to much more severe penalties.

The new lists were the first of a slew of new restrictions announced Friday on technology exports to China to block military advances. The crackdown included curtailing access to chip-making tools for Chinese companies, including Yantze Memory Technologies Co (YMTC), as reported by Reuters a day earlier. read more

US senators from both sides have called for YMTC, China’s fast-growing chip maker, to be put on a blacklist known as the “entity list.” The company, founded in 2016, poses a “direct threat” to US chip companies, according to the Biden administration.

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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 US export controls by selling chips to blacklisted Chinese telecommunications company Huawei Technologies Co Ltd. The chips are also being assessed by Apple Inc for inclusion in some of its iPhones in China, a major concern for US lawmakers and the Biden administration.

Companies were added to the unverified list because the United States was unable to complete 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 perform additional due diligence before shipping goods to entities placed on the “unverified list,” such as the 31 added Friday, and may need to apply for more permits.

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

Entity listing YMTC would further escalate tensions with Beijing and force its US suppliers to obtain hard-to-obtain US government licenses before shipping even the most low-tech items.

Not all of the measures announced Friday were bad news for China. The United States has 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 had been able to conduct an inspection of the Wuxi city site, a stepping stone towards removal from the list.

A spokeswoman for Wuxi Biologics said the company was pleased that the Wuxi site was removed from the list, given the inspection in June. The company is looking forward to scheduling an inspection of its subsidiary in Shanghai, which was also placed on the unverified list in February, it 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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