Seven HK firms added to US red-flag trading list

Top News | Sophie Hui and Reuters 12 Apr 2019

Seven Hong Kong firms have been red-flagged by the United States Department of Commerce, which says they "should be treated with caution."

The department said it is adding 37 Chinese companies and schools to the list of "unverified" entities that US firms should treat with caution, according to a notice in the Federal Register.

The seven Hong Kong companies are mostly logistics or technology firms.

They are Able Supply Chain Ltd, Boson Technology Co Ltd, HK Hengyu Storage Logistics Ltd, Ling Ao Electronic Technology Co Ltd, Rising Logistics Company Ltd, Swelatel Technology Ltd, and Universe Market Ltd.

Most of these companies have more than one address in Hong Kong.

For example, Able Supply Chain has three addresses - two in Sha Tin and one in Sheung Wan - according to the US list.

A company search showed there is no well-known people among its directors, while some of them are mainlanders. It also does not have a company website.

Able Supply Chain has a short profile on the Hong Kong Trade Development Council's website.

It is a small export company and wholesaler doing jewelry business and its major markets are North America, Europe, Japan and Hong Kong.

The list takes effect from today.

Apart from the Chinese and Hong Kong companies, the list also includes four organizations in the United Arab Emirates, two in Malaysia and one in Indonesia.

One company on the list is the Aisin Nantong Technical Center, a Chinese subsidiary of a Japanese auto parts manufacturer. Another is Beijing Bayi Space LCD Materials Technology Co Ltd, which has received patents for high-end screen technology.

Several others specialize in precision optics, electronics, machine tools or aviation.

Being put on an list means that US suppliers to the unverified companies and schools can no longer use license exceptions to, for example, sell products to repair goods that were sold previously, said Kevin Wolf, a former assistant secretary of commerce for export administration.

But instead they will have to get a new license, Wolf added.

"Even though it's not an embargo because of the hassle sometimes suppliers will treat it as an embargo," Wolf said.

"It has a practical effect that's greater than the legal effect."

The department will put entities on the "unverified" list if the organizations decline to answer questions about how US goods are used.

Schools on the list include Changchun Institute of Applied Chemistry, whose website says it specializes in physics and chemistry research aimed at defense and economic development as well as training graduate students.

Other schools on the list are the Guangdong University of Technology in Guangzhou, Renmin University, Tongji University in Shanghai and two schools in Xi'an.

The department also removed five Russian companies, three Chinese entities and one Finnish firm from the list.

In Beijing, China's commerce ministry spokesman Gao Feng said the US government should correct its wrong behavior and remove the relevant companies from the list as soon as possible.

Gao said the US decision has smudged the reputation of Chinese enterprises and hindered normal trade.

He said the Chinese government opposes the United States abusing the export control measures to restrict enterprises to develop international trade and cooperation.

sophie.hui@singtaonewscorp.com

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