US approved 192 licenses for exports to blacklisted Chinese firms early 2022

(C) Reuters. FILE PHOTO: Stacked containers and cranes are shown at the Port of Los Angeles in Los Angeles, California, U.S. November 22, 2021. REUTERS/Mike Blake

By Karen Freifeld

(Reuters) – The Biden administration approved 192 licenses worth over $23 billion to ship U.S. goods and technology to Chinese companies on a U.S. trade blacklist in the first quarter of last year, according to a document released by a U.S. congressional committee on Friday.

The 192 licenses granted were out of 242 license applications decided between January and March 2022, a chart showed, and 115 of those approved contained controlled technology. Nineteen, or 8 percent of the total number of applications, were denied, and 31 were returned without action.

Republican Representative Michael McCaul, chair of the U.S. House of Representatives Foreign Affairs Committee, released the license numbers on Friday after revealing at a hearing on Tuesday that more than $23 billion worth of licenses were approved for suppliers to companies on the U.S. Department of Commerce’s “entity list” in the first quarter of 2022.

In a statement on Friday, McCaul called the approvals unacceptable. “This critical U.S. technology is going to the Chinese Communist Party’s surveillance and military efforts,” he said.

The Commerce Department’s Bureau of Industry and Security(BIS) “must and can do more.”

The Commerce Department defended the decisions.

“Every license reflected in this data — which primarily involve exports of low-technology …and other items that do not pose significant national security concerns … was carefully reviewed,” the agency said in a statement, explaining that the decisions are made by the Departments of Commerce, Defense, State, and Energy.

BIS also noted that licenses for some well-known Chinese companies are reviewed under policies set by the Trump administration that do not carry presumptions of denial.

In addition, it pointed out that exporters generally submit license applications that have a higher likelihood of approval, that licenses are generally valid for four years, and that a substantial number are not fully utilized.

Between November 2020 and April 2021, suppliers to China’s Huawei got 113 licenses worth $61 billion, and another 188 licenses valued at nearly $42 billion were greenlighted for Semiconductor Manufacturing International Corp (SMIC), according to data first obtained by Reuters and released by McCaul in October 2021.

The House Foreign Affairs Committee gave consent to release the latest data this week, but McCaul only disclosed the $23 billion figure and not the details on the number of licenses at Tuesday’s hearing on combating Chinese aggression.