China adds three US firms to unreliable entities list

China has decided to add three US companies — General Atomics Aeronautical Systems, General Dynamics Land Systems, and Boeing Defense Space and Security — to its unreliable entities list, the Ministry of Commerce announced on Monday.

These companies, involved in arms sales to China's Taiwan region, are now subject to heightened scrutiny and restrictions.

Under the new rules, the government will prohibit these three companies from engaging in import and export activities related to China and making new investments in its market, said the ministry in an online notice.

The government will neither approve nor maintain the work permits, stays, or residence qualifications for the senior executives of these three US companies in China.

Evidence also indicates that the US company Caplugs has circumvented regulations such as the unreliable entities list by transferring goods purchased from China to companies already listed on the unreliable entities list, according to the notice.

When conducting export business with Caplugs, domestic companies should be aware of the risks of improper transfers. They must perform due diligence, enhance their duty of care, strengthen trade flow management, and take appropriate measures to ensure that relevant goods, technologies and services are not transferred to foreign entities on the unreliable entities list, according to the Commerce Ministry.