US Commerce Department adds 33 Chinese entities to export control unverified list

On Monday, the U.S. Commerce Department added 33 Chinese entities to its ‘unverified list’, saying it was unable to verify the legitimacy and reliability of those entities in relation to their use of U.S. exports.

The Chinese entities includes listed companies, universities as well as aerospace and electronics suppliers.

With the news reaching the market, shares of WuXi Biologics, whose units in Wuxi and Shanghai were added to the unverified list, fell by more than 25% wiping out $9.9 billion (HK$77 billion) in its market valuation.

Trade in shares of the company, which makes ingredients for vaccines including AstraZeneca’s COVID-19 vaccine, was later halted.

In a statement WuXiBio said, it had imported manufacturing equipment subject to U.S. export controls, and that the US move would have no impact on its business or ongoing services to global partners.

In an investor call, WuXiBio’s CEO Chris Chen said “WuXi Bio was prevented by U.S. export controls from reselling or re-exporting items purchased from the United States but that the Commerce Department had been unable to conduct checks that WuXi Bio was in compliance due to the pandemic.”

He went on to add, “Because of COVID-19, they have not been able to travel here in the last two years to verify us, so they have put us on this ‘unverified list'”.

“The affected companies are only in Shanghai and Wuxi and our factories in Shanghai and Wuxi have already been built, so there is no longer any need to buy large amounts of hardware for bioreactors.”

Lawyers for the company plan on negotiating with the U.S. Commerce Department, he said.

Shares of Hymson, which manufactures laser and automation equipment, fell by more than 7% after one of its unit was added to the list.

In a statement Hymson said, the addition would not have any significant or adverse effect on its operations or financial situation. It went on to add, it would evaluate what impact the listing could have on the company’s future development.

($1 = 7.7947 Hong Kong dollars)

Categories: Creativity, Economy & Finance, Entrepreneurship, HR & Organization, Regulations & Legal, Strategy

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