By Doina Chiacu and Karen Freifeld
WASHINGTON (Reuters) – The United States restricted trade with five companies on Wednesday that it said were helping produce and procure drones for use by Russia in Ukraine and by Iran-backed Houthis in Red Sea shipping attacks.
The companies from Russia and China were among 11 additions to the Commerce Department’s “Entity List,” which means suppliers need licenses before shipping goods and technology to them.
Russia has intensified its drone and missile strikes against Ukrainian energy facilities in recent weeks, causing significant damage and threatening a repeat of the blackouts experienced in the first year after Russia invaded Ukraine in February 2022.
The Commerce Department added a Chinese entity, Jiangxi Xintuo Enterprise Co, for supporting Russia’s military through the procurement, development, and proliferation of Russian drones, it said.
Shenzhen Jiasibo Technology Co of China was cited for being part of a network procuring aerospace components, including drone applications, for an aircraft company in Iran. Three Russian entities – Aerosila JSC SPE, Delta-Aero LLC, and JSC ODK-Star – were added for being part of the network.
“These components are used to develop and produce Shahed-series UAVs which have been used by Iran to attack oil tankers in the Middle East and by Russia in Ukraine,” the Federal Register notice said, referring to unmanned aerial vehicles.
Attacks on ships including oil tankers by Iranian-backed Houthis have disrupted global shipping through the Red Sea. Yemen’s Houthi militia say they are retaliating against Israel’s war against Palestinian Hamas militants in Gaza.
Companies are added to the U.S. Entity List when Washington deems them a threat to U.S. national security or foreign policy. Suppliers must then be granted licenses, which are likely to be denied, before shipping goods to entities on the list.
The two UAE citations, Khalaj Trading LLC and Mahdi Khalaj Amirhosseini, were added for apparently violating Iran sanctions by exporting or trying to export items from the United States to Iran through UAE, according to the posting.
Four Chinese entities were cited for acquiring U.S. items to support China’s military modernization efforts, it said. They are LINKZOL (Beijing) Technology Co, Xi’an Like Innovative Information Technology Co, Beijing Anwise Technology Co and SITONHOLY (Tianjin) Co.
U.S.-Chinese military contacts resumed late last year but tensions continue due to fundamental differences over Taiwan and the South China Sea that remain dangerous potential flashpoints.
Chinese leader Xi Jinping has pumped billions into buying and developing equipment as part of his modernizing efforts to build a “world-class” military by 2050, with Beijing’s outsized defense budget growing at a faster pace than the economy for some years.
