whether to place a foreign entity on the UEL, the Working Mechanism evaluates the following statutory factors: ^ The degree of danger to the national sovereignty, security or development interests of China; ^ The degree of damage to the legitimate rights and interests of Chinese enterprises, other organizations or individuals; ^ Whether it is in compliance with internationally accepted commercial and trade rules; and ^ Other factors. Designated entities or individuals may face one or more of the following: ^ Restrictions or prohibitions on engaging in China-related import and export activities; ^ Restriction or prohibition on trading and investing in China; ^ Restricting or prohibiting relevant personnel or transportation vehicles, etc. of the foreign entity from entering China; ^ Restriction or revocation of work permits or residence authorization; ^ Imposition of monetary fines according to the severity of the circumstances; and ^ Other penalties or measures at the discretion of the Working Mechanism. The Working Mechanism will announce entities designated to the UEL, including risk alerts related to doing business with such entities. Announcements may also provide for curing periods during which the designated entity may take corrective action, and the foregoing punitive measures will not be imposed. Designated entities may apply to the Working Mechanism for removal from the UEL. In addition,
^ Suspends normal transactions with or discriminates against Chinese entities in violation of normal market transaction principles and causes serious harm to the legitimate rights and interests of Chinese entities. On February 16, 2023, MOFCOM added Lockheed Martin Corporation and Raytheon Missiles & Defense to the UEL. Later, on May 20, 2024, three additional U.S. companies – Boeing Defense, Space & Security, General Dynamics Land Systems and General Atomics Aeronautical Systems – were also designated. On April 4 and April 9, 2025, a total of 17 U.S. firms were designated to the UEL. However, following high- level U.S.-China economic and trade consultations, the implementation of these 2025 designations has been significantly adjusted. Effective August 12, 2025, the restrictions targeting the six firms from the April 9 announcement were permanently terminated. Meanwhile, the enforcement of measures against the 11 firms from the April 4 announcement was systematically deferred, resulting in a one-year suspension that took effect on November 10, 2025. For any entity currently subject to active enforcement – mandated sanctions include steep fines, total prohibitions on China-related import and export activities and bans on making new investments in China. In addition, senior management personnel of these entities are prohibited from entering China and any work permits or visas have been canceled or will be denied. Unreliable Entity List – Review Procedures and Penalties The UEL is overseen by an inter-agency Working Mechanism body with its administrative office established within MOFCOM. This Working Mechanism is authorized to investigate and designate any foreign entity that violates normal market transaction principles by terminating normal transactions or applying discriminatory measures against Chinese enterprises for non-commercial purposes. When determining
China
21
Powered by FlippingBook