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ARW - Arrow Electronics Inc News Story

$101.37 2.6  2.7%

Last Trade - 05/03/21

Sector
Technology
Size
Large Cap
Market Cap £5.30bn
Enterprise Value £6.70bn
Revenue £20.64bn
Position in Universe 1078th / 6647

UPDATE 5-U.S. publishes list of Chinese and Russian firms with military ties

Mon 21st December, 2020 9:18pm
(Adds China commerce ministry response in paragraph 6)
    By Karen Freifeld
    Dec 21 (Reuters) - The Trump administration on Monday
published a list of Chinese and Russian companies with alleged
military ties that restrict them from buying a wide range of
U.S. goods and technology.
    Reuters first reported last month that the U.S. Department
of Commerce drafted a list of companies that it linked to the
Chinese or Russian military, news that brought a rebuke from
Beijing.  urn:newsml:reuters.com:*:nL1N2I701N
    The final list does not include Commercial Aircraft
Corporation of China (COMAC), or the Hong Kong subsidiaries of
Colorado's Arrow Electronics  ARW.N  and Texas-based TTI Inc, a
Berkshire Hathaway  BRKa.N  electronics distributor. Those
companies were on the draft list seen by Reuters. 
    However, Shanghai Aircraft Design and Research Institute,
which designs COMAC planes, and Shanghai Aircraft Manufacturing
Co, which manufactures COMAC planes, are on the list. 
    China urged the United States to stop what it called
erroneous actions and treat all companies in an equal way,
foreign ministry spokesman Wang Wenbin said at a daily news
conference in Beijing on Tuesday.
    Its Ministry of Commerce later said in a statement that it
firmly opposed the inclusion of Chinese companies on the U.S.
list and would take necessary measures to safeguard the
legitimate rights and interests of Chinese enterprises.
 urn:newsml:reuters.com:*:nP8N2IY00T 
    The final list names 103 entities, 14 fewer than on the
draft list seen by Reuters in November. Fifty-eight are
designated under China, down from 89, and 45 entities are tied
to Russia, up from 28.
    Commerce Secretary Wilbur Ross said on Monday the action
establishes a new process "to assist exporters in
screening their customers for military end users." 
    The final list was published on the Commerce Department
website https://www.commerce.gov/news/press-releases/2020/12/commerce-department-will-publish-first-military-end-user-list-naming
 on Monday and is scheduled to be posted for public inspection
in the Federal Register on Tuesday.
    Publishing the list in the waning days of the Trump
administration follows the addition of dozens of Chinese
companies to another U.S. trade blacklist, including the
country's top chipmaker, SMIC  0981.HK , and drone manufacturer
SZ DJI Technology Co Ltd, on Friday.  urn:newsml:reuters.com:*:nL1N2IY0S3
    Tensions between the United States and China have escalated
over the past year, as Trump blamed it for the coronavirus
pandemic, China imposed a national security law in Hong Kong and
a dispute involving the South China Sea has intensified.
    The U.S. government also has grown increasingly concerned
about China’s “military-civil fusion,” a policy that aims to
build up its military might and technological development in
tandem.
    In the spring, the Commerce Department expanded the
definition of "military end users," as the department defines
the companies with military ties.  urn:newsml:reuters.com:*:nL2N2CF0JS
    The category includes not only armed service and national
police, but any person or entity that supports or contributes to
the maintenance or production of military items - even if their
business is primarily non-military.
    The "military end user" designation requires U.S. companies
to obtain licences to sell to the firms, which are more likely
to be denied than granted. 
    The list is not definitive and Commerce said U.S. companies
must continue to do their own due diligence to help decide
whether their buyers are considered military end users.
    While COMAC was removed, seven Aviation Industry Corporation
of China (AVIC) subordinate entities remain on the list.
    General Electric Co  GE.N  and Honeywell International
 HON.N  both have joint ventures with AVIC and supply COMAC,
which is spearheading Chinese efforts to compete with Boeing Co
 BA.N  and Airbus  AIR.PA .
    This month, Arrow and TTI both denied their subsidiaries
have ties to the Chinese military and said they were working to
be removed from any final list.  urn:newsml:reuters.com:*:nL4N2II3P7    

 (Reporting by Karen Freifeld in New York; Additional reporting
by Stella Qiu, Cate Cadell and Tom Daly; Editing by Chris
Sanders, Matthew Lewis and Andrea Ricci, William Maclean)
 ((karen.freifeld@thomsonreuters.com; +1(646) 223-6921;))
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