China Reveals Punishment for Firms on Unreliable Entity List

China will impose penalties including restricting trade, investment and visas to any company, country, group or person that appears on its “unreliable entity list,” according to guidelines published on Saturday.

The list will contain names of entities that pose a threat or potential threat to China’s sovereignty, national security, development and business interests; and those that discriminate against or harm Chinese businesses, organizations or individuals, the Ministry of Commerce said on its website on Saturday.

The new policies for punishing those on the list took effect Saturday, and include bans on investment, restrictions of work and residence permits, and in some cases fines.

Entities to be included in the list may be given a period of time to rectify their actions during which the punishments will not apply, and can be taken off the list if the negative consequence of their actions are removed during the grace period. Certain cases where Chinese parties have a real need to engage in trade with those on the list may apply for exemption, and listed entities may also apply to be removed from the list after they are placed.

China first announced it was drawing up the list in mid-2019 at the height of the trade war with the U.S. Saturday’s announcement come as Chinese apps Tiktok and WeChat face a looming ban in the U.S., making them unavailable for download and prohibiting transactions within the U.S.

In a separate statement Saturday, China’s Ministry of Commerce condemned the move against WeChat and TikTok, saying that it would take “necessary measures” to protect the legal interests of Chinese firms, without elaborating.

— With assistance by Sharon Chen, and April Ma

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