Kiev. January 16. INTERFAX-UKRAINE-The Bureau of Industry and Security (BIS) of the US Department of Commerce has added the Chinese company Skyrizon, which invested in shares of the Ukrainian manufacturer of aircraft engines "Motor Sich", to the list of "military end users" (MEU), first formed at the end of last year and included 58 Chinese and 45 Russian companies.
"Skyrizon - a Chinese state-owned company - and its desire to acquire and implement foreign military technologies pose a serious threat to national security and the interests of US foreign policy," said Secretary Wilbur Ross in a release from the US Department of Commerce.
According to him, such US measures will serve as a warning to the export community about Skyrizon's significant ties with the People's Liberation Army of China.
Earlier, the Ministry of Trade indicated that the MEU list is a tool used by the BIS to restrict the export, re-export and transfer (within the country) of goods subject to Export Control Rules (EAR) to individuals (individuals, organizations, companies). We are talking about individuals who are considered to have been involved or pose a significant risk of involvement in activities that are contrary to the interests of national security or foreign policy of the United States.
Additional licensing requirements apply to the export, re-export, and transfer (within the country) of items subject to EAR to listed entities, and the availability of most licensing exceptions is limited.
The U.S. government has determined that organizations on the MEU list pose an unacceptable risk of using or diverting technology for "military end-use" or "military end-users" in China, Russia, or Venezuela.
Changes to the list are made by the end-user Review Committee, an interagency body consisting of representatives from the Department of Commerce, as well as the Department of Defense, the Department of Energy, the State Department, and, if necessary, the U.S. Treasury Department.
Skyrizon was the first company to be added to the list since it was compiled at the end of last year.
As reported, the Skyrizon subsidiary of the Chinese Beijing Xinwei Technology Group and the DCH company of Ukrainian businessman Alexander Yaroslavsky in late November announced the submission of an updated joint application to the Antimonopoly Committee of Ukraine for the purchase of Motor Sich, the fourth since August of this year.
According to a government source, currently about 75% of Motor Sich shares are already owned by a group of Chinese owners, and some part of the disputed stake is a pledge for financing provided, among other things, by China Development Bank.
US concern about the sale of Motor Sichi to Chinese owners was expressed during a visit to Kiev at the end of August 2019 by John Bolton, then the US President's security adviser. At the end of the year before last, the US Charge d'affaires in Ukraine, William Taylor, noted that the US is counting on a new deal to attract an American or other investor to Motor Sich, so that the company is not sold to a Chinese buyer. According to the agency, this issue was also raised during the visit of US Deputy Secretary of State Stephen Bigan to Ukraine in late August 2020.
The shares of Motor Sich have been under arrest since April 2018 at the request of the SBU investigator in order to preserve material evidence in a criminal case initiated in July 2017 in connection with the purchase of its shares by Chinese investors who have not yet been able to exercise the rights of shareholders to manage the enterprise.
In early December 2020, Chinese investors sent an investment dispute to international arbitration in order to recover damages from the state of Ukraine, estimated by them at $3.5 billion.