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

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

[html]By Karen Freifeld and Alexandra Alper WASHINGTON (Reuters) -The United States on Friday added China’s top memory chipmaker YMTC and 30 other…
                              

By Karen Freifeld and Alexandra Alper


WASHINGTON (Reuters) -The United States on Friday added China’s top memory chipmaker YMTC and 30 other Chinese entities to a list of co*panies that U.S. officials have been unable to inspect, ratcheting up tensions with Beijing and starting a 60 day-clock that could trigger much tougher penalties.


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


U.S. senators from both parties have been calling for YMTC, China’s fast-growing chip manufacturer, to be placed on a trade blacklist known as the “entity list.” The co*pany, founded in 2016, poses a “direct threat” to U.S. chip co*panies, according to the Biden administration.


YMTC and the Chinese embassy in Washington did not respond to requests for co*ment.


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


co*panies are added to the unverified list because the United States could not co*plete on-site visits to determine whether they can be trusted to receive sensitive technology exports from the United States. U.S. inspections of Chinese co*panies require the approval of China’s co*merce ministry.


U.S. exporters must conduct 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 co*panies placed the unverified list, Washington will start the process for adding them to the entity list after 60 days.


Entity listing YMTC would further escalate tensions with Beijing and force its U.S. suppliers to seek difficult-to-obtain licenses from the U.S. government before shipping them even the most low-tech items.  


Not all 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 U.S. officials had been able to conduct an inspection at the Wuxi city site, a stepping stone to removal from the list. 


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


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


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