China adds three U.S. firms to unreliable entities list for selling arms to Taiwan island

China on Monday added three U.S. companies including Boeing Defense, Space & Security, General Atomics Aeronautical Systems and General Dynamics Land Systems to the unreliable entities list, and imposed several sanctions, including a ban on trade with China as well as huge fines, against the firms for participating in arms sales to the Taiwan island.

According to two statements on the website of the Ministry of Commerce (MOFCOM), the three U.S. companies are banned from imports and exports activities related to China or increasing new investments in China. Additionally, their executives are banned from entering China, and will have any existing entry or work permits revoked.

As for Boeing Defense, Space & Security, the company will face fines doubling the value of its military sales to Taiwan since the implementation of the unreliable entities list. The company will be required to pay the penalties within 15 days, or face punishments including a further doubling of the penalty, according to the statement.

In February 2023, China placed U.S. defense contractors Lockheed Martin Corp and Raytheon Missiles & Defense to its unreliable entities list. However, it was found that U.S. firm Caplugs evaded regulations prescribed under the unreliable entities list by transferring commodities purchased from China to companies on China’s unreliable entities list, MOFCOM said.

MOFCOM urged Caplugs to take immediate actions to ensure that it will not transfer related goods, technologies and services imported from China to companies on the unreliable entities list, and submit relevant evidence. Otherwise, the Chinese authorities will take measures against the company in line with laws and regulations.

By including the companies in the unreliable entities list, China is taking necessary measures to protect its national security and territorial integrity, as the U.S. companies selling arms to Taiwan island harms peace and stability across the Taiwan Straits, Gao Lingyun, an expert from the Chinese Academy of Social Sciences told the Global Times on Monday.

China has been urging U.S. to stop arms sales and cut military contact with China’s Taiwan region. 

Chinese foreign ministry spokesperson Mao Ning told a press briefing in February that the U.S. arms sales to Taiwan seriously violate the one-China principle and the stipulations of the three China-U.S. joint communiques, particularly the August 17 Communique of 1982.

"Such sales undermine China's sovereignty and security interests, and harm China-U.S. relations and peace and stability across the Taiwan Strait," Mao said.

Mao said China urges the U.S. to abide by the one-China principle and the three China-U.S. joint communiques, stop arms sales to and cut military contact with Taiwan, and stop creating factors that could heighten tensions in the Taiwan Straits.