China Calls for Compliance With Trade Restrictions on Lockheed, Raytheon

Chinese companies should “strengthen” their due diligence procedures to make sure they’re not doing business with U.S. defense companies Lockheed Martin and Raytheon, which were placed on China’s so-called Unreliable Entity List in February (see 2302160064), China’s Ministry of Commerce said this week. Both firms are blocked from “engaging in import and export activities related to China,” which will “prevent Chinese products from being used in their military business,” a ministry spokesperson said April 18, according to an unofficial translation.

“In business activities,” Chinese companies “should strengthen due diligence and compliance system construction, and verify transaction information,” the spokesperson said. When a Chinese company “engages in activities such as export, transit, transshipment, and transportation, if it knows that the actual importer or user is the above two U.S. companies, it is not allowed to carry out relevant import and export activities.” Violators “will be held accountable,” the spokesperson said.

Lockheed and Raytheon were added to the list for their arms sales to Taiwan. While neither firm sells defense products to China, the trade restrictions could affect trade involving China’s commercial industry, including the aviation sector.