Two WuXi Biologics subsidiaries in Shanghai and Wuxi were added to the Unverified List (UVL) of the US Commerce Department (Commerce) on February 7, 2022.
In total, 33 Chinese companies were placed on the list yesterday.
The UVL shows names of companies that Commerce's Bureau of Industry Security (BIS) cannot verify as bona fide because an end-user check could not be completed to a satisfactory level.
US exporters are required to go through more procedures before shipping goods to the entities on the list. They must apply for a license to do so. Companies included on the UVL must prove that they are compliant with US regulations in order to be removed from the UVL.
COVID-19 linked delays
WuXi, in a statement on the issue, said it understood that the reason for this action is because US government agencies have not been able to undertake required end-use verifications to allow certain equipment to be exported from US suppliers.
“WuXi Biologics has been importing certain hardware controllers for bioreactors and certain hollow fiber filters that are subject to US export controls but have received [US] Commerce Department approval for the last 10 years. We are in compliance with all US export control regulations. We do not re-export or resell these items to any other entity.
"The [US] Commerce Department has a routine process to verify the proper use (i.e. self-use, no resale) of these on site. This process has not been completed in the last two years due to the COVID-19 pandemic.”
No impact on business
The Chinese biotech said the action would have no impact on its business or ongoing services to global partners. The company is pursuing interim measures to remove its subsidiaries from the list, it added.
The Biden administration has been actively trying to make it challenging for China to secure cutting-edge technologies by placing its companies on a series of lists that restrict trade and investment, according to the Financial Times.