The U.S. Department of Commerce, Bureau of Industry & Security (BIS) has added 33 China-based companies to its Unverified List, which now includes more than 100 entities located in China. A listing of these companies is provided in the appendix below.
Effective February 8, 2022, the export, reexport, or transfer of any items subject to the Export Administration Regulations (EAR) — including goods, software, and technology — to any of the companies added to the Unverified List will require enhanced diligence and documentation, including in some instances a certified “UVL Statement” from the listed entity. Inclusion on the Unverified List also precludes reliance on any license exception, meaning that the exporter must seek an export license from BIS before exporting controlled items to these entities.
A company doing business with an Unverified List designee must first determine whether the transaction involves an item subject to the EAR — including even non-“dual use” items and those designated EAR99. (The provision of services and certain published materials are generally excluded.) If so, the company must then determine whether a license is required for the intended destination (e.g., China), end-user, or end use; and even when no license is required, the company must still obtain a UVL Statement from the listed entity certifying its compliance with the EAR and committing to cooperation with end-use checks by BIS. Records relating to the transaction, regardless of whether a license is required, must be kept for at least five years.
The exclusion from license exception eligibility impacts items that, although subject to a license requirement for certain destinations such as China, can ordinarily be exported without a license, provided the requirements of an applicable license exception are met. For example, technology companies that supply encryption software classified under the Export Control Classification Number (ECCN) 5D002 routinely rely on License Exception ENC to lift a license requirement for end-users located in China. Those companies will now need an export license from BIS before providing the same software (and potentially software updates) to the Unverified List entities.
BIS added the 33 China-based entities to the Unverified List because it has been unable to sufficiently determine the entities’ legitimacy or reliability as end-users of items subject to the EAR. While additions to the Unverified List are not necessarily predicated on specific national security or foreign policy concerns, this action reflects the U.S. government’s increased scrutiny of China’s business practices and continued focus on perceived threats from China. BIS indicated the Unverified List update, which follows the addition of 34 Chinese companies to the Entity List last December, is intended in part to “signal to the [Chinese] government the importance of their cooperation” in assisting BIS with verifying the legitimacy and reliability of these parties to receive U.S. exports. Delays in the ability of BIS to conduct such verification checks may have also resulted from the COVID-19 pandemic. Although designations on the Unverified List may not reflect wrongdoing by the listed entities, these listings are in some cases confused with other U.S. government prohibited party listings having broader impact (e.g., BIS’s Entity List and the Office of Foreign Assets Control’s Specially Designated Nationals (SDN) List).
Entities seeking removal from the Unverified List may petition BIS and supply information to verify their legitimacy and reliability.
Please contact Goodwin’s Global Trade team with questions about the Unverified List or the impact of these recent additions on your business.
Appendix: List of Companies Added to the Unverified List on February 8, 2022
The names and websites of the companies recently added to the Unverified List suggest operations in a wide range of industries, including electronics, optoelectronics, semiconductor manufacturing, wind and solar energy, unmanned aerial vehicles (UAVs), industrial equipment, heavy machinery, specialty chemicals, biotechnology, and pharmaceuticals, among others. Universities are also among the recent Unverified List designees.
- AECC South Industry Co., Ltd., Dongjiaduan, Lusong District, Zhuzhou, Hunan Province, China
- Beijing SWT Science, Yingbinbei Road 36, Yanjiao Economic & Development Zone, Sanhe City, Hebei Province, China
- Beijing Zhonghehangxun Technology Co., Ltd., Room 1705, Kaixuancheng Building E, No. 170 Beiyuan Road, Chaoyang District, Beijing, China
- China National Erzhong Group Deyang Wanhang Die Forging Co., Ltd., No. 460 Zhujiang Road West, Deyang City, Sichuan Province, China
- Chuzhou HKC Optoelectronics Technology Co., Ltd., No.101 Suchu Ave., Economic and Technological Development Zone, Nanqiao District, Chuzhou, Anhui Province 239000, China
- Dongguan Durun Optical Technology Co., Ltd., Building M Shing'ang Industrial Area, Houda Road, Dalingshan, Dongguan, Guangdong Province 523000, China
- Dongguan Huiqun Electronic Co., Ltd., 30 Daling Street, Jiaoyitang, Tangxia Town, Dongguan City, Guangdong Province 523723, China
- Guangdong Guanghua Sci-Tech Co., No. 295 Daxue Road, Shantou, Guangdong Province, China
- Guangxi Intai Technology Co., Ltd., 1 Jianan Road, Liuzhou City, Guangxi Province, China
- Guangzhou Hymson Laser Tehnology Co., Ltd., No. 2 Shiling Road, Dongchong Town, Nansha District, Guangzhou, Guangdong Province 511453, China
- Harbin Xinguang Feitian, 1717 Chuangxin Yi Road, Harbin, Heilongjiang Province, China
- Hefei Anxin Reed Precision Co., Ltd., No. 15 South Feiyang Road, Dayang Industry Park, Luyang District, Hefei City, Anhui Province 230000, China
- Heshan Deren Electronic Technology Co., Ltd., No. 13 Hongjiang Road, Heshan Industry City, Heshan City, Guangdong Province 529728, China
- Hubei Longchang Optical Co., Ltd., No. 4 Group Lianhuayan Village, Yaojiadian Town, Yidu City, Hubei Province 44300, China
- Hubei Sinophorus Electronic Materials Co., Ltd., No. 66-3, Xiaoting Road, Yichang, Hubei Province, China
- Hunan University, State Key Lab of Chemo/Biosensing & Chemometrics, Lushan Road, Yuelu District, Changsha, Hunan Province, China
- Jinan Bodor CNC Machine Co., Ltd., 1299 Xinluo Ave., Hi-Tech Zone, Jinan, Shandong Province, China
- Jiutian Intelligent Equipment Co., Ltd., Woyun Road, Taohue Industry Park, Hefei Economic Zone, Hefei, Anhui Province, China
- Kunshan Heng Rui Cheng Industrial Technology Co., Ltd., No. 1088 Datong Road, Penglang Town, Kunshan Development Zone, Kunshan, Jiangsu 215300, China
- Shanghai Fansheng Optoelectronic Science & Technology Co., Ltd., No. 56 Jungong Road, Yangpu District, Shanghai, China
- Shanghai Micro Electronics Equipment (Group) Co., Ltd., No. 1525 Zhangdong Road, Zhangjiang Hi-Tech Park, Pudong, Shanghai, China
- Shuang Xiang (Fujian) Electronics, No. 158 Jiangbin East Ave., Mawei, Fuzhou, Fujian 350300, China
- Southern University of Science and Technology, Department of Mechanical and Energy Engineering, 1088 Xueyuan Ave., Nanshan District, Shenzhen, Guangdong 518055, China
- Suzhou Chaowei Jingna Optoelectric Co., Ltd., No. 97-1 Dongyuan Road, Jinting Town, Wuzhong District, Suzhou, Jiangsu, China
- Suzhou Gyz Electronic Technology Co., Ltd., No. 629 Songjiagang Road, Zhoushi Town, Kunshan City, Jiangsu Province 215314, China
- Suzhou Lylap Mould Technology Co., Ltd., No. 66-26 Linggang Road, Luzhi Town, Wuzhong District, Suzhou, Jiangsu Province, China
- Wuxi Biologics Co., Ltd., No. 108, Warehouse, Meiliang Road, Mashan Binghu, Wuxi, China, and
No. 178 West Meiliang Road, Mashan Binghu District, Wuxi, China, and
No. 200 Meiling Road, Mashan Town, Binhu District, Wuxi City, China
- Wuxi Biologics (Shanghai) Co., Ltd., Room 701, 7F, No. 02 Huajing Road, Waigaoqiao Free Trade Zone, Shanghai, China, and
Bldg. 71-B, 96 Yiwei Road, Waigaoqiao Free Trade Zone, Shanghai, China
- Wuxi Turbine Blade Co., Ltd., 1800 Huishan Avenue, Huishan Economic Development District, Wuxi, Jiangsu Province, China
- Yunnan Fs Optics Co., Ltd., Hongta Industrial Zone, Hongta District, Yuxi, Yunnan Province, China
- Yunnan Tianhe Optoelectronic Co., Ltd., Longquan Avenue, Longquan Industrial Zone, Jiangchuan, Yuxi City, Yunnan Province, China
- Zhengzhou Baiwai Intelligent Automation, National University Tech Park, Changchun Road, #11 Hi-Tech District, Zhengzhou City, Henan Province, China
- Zhuzhou CRRC Special Equipment Technology Co., No. 79 Liancheng Road, Shifeng District, Zhuzhou City, Hunan Province 412001, China.