China Affiliates of US Chip Maker Taken Off Sanctions List

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Arrow Electronics Inc. said Saturday that the United States is lifting sanctions on its China-based affiliates, put in place after U.S.-made components were found in drones used by proxies of the Iranian regime, Hamas and Houthi terrorists.

On Oct. 8, the Commerce Department sanctioned 19 China-based companies for supplying American technology to terrorist organizations. Among the companies were six affiliates of Centennial, Colorado-based Arrow Electronics, Inc.

The affiliate companies were added to the department’s export blacklist, called the Entity List, for allegedly helping Iranian-backed terrorists buy American technology. The blacklist removal comes less than two weeks after the announcement.

The Commerce Department manages the list and publishes it in the Federal Register. Exporting technology or goods to companies on the list requires a license, which may be denied by the U.S. government. Firms end up on the Entity List for U.S. national security or foreign policy considerations.

The American-based company was placed on the blacklist after a company called Arrow Electronics (Hong Kong) Co., Ltd., came under department scrutiny. The department at the time identified Arrow Electronics (Hong Kong) Co., Ltd., as a subsidiary of Colorado-based Arrow Electronics Inc.

However, the department has now said that despite the similarities in name, the two companies are not linked. Therefore, the six affiliates of American-based Arrow Electronics Inc. will now be removed from the list.

Asked about the matter, a spokesperson for the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) said in an email: “BIS is committed to ensuring that export restrictions are appropriately targeted to protect national security.”

With their removal from the list, Arrow can resume business with its China-based affiliates. “We have received official communication from the U.S. Commerce Department,” Arrow spokesman John Hourigan said. “Arrow is authorized to resume shipping to and from these entities under the same conditions that applied prior to October 8.”

In 2024, Arrow Electronics had global sales of $28 billion.

The removal of the restrictions should soon be published in the Federal Register.

The original Federal Register filing said that nations in the Middle East recovered scraps of unmanned aircraft from Iran’s proxy wars.

“These additions are being made based on information indicating that around October 7, 2023, Israel Defense Forces recovered numerous weaponized unmanned aircraft vehicles (UAVs) operated by Iranian proxies, including Hamas militants,” the filing states.

The recovered scraps eventually led to the identification of 10 China-based companies involved in selling U.S.-made components to Iran, among them being Arrow Electronics (Hong Kong) Co., Ltd. By providing terrorists with U.S.-origin drone parts, these companies were violating U.S. sanctions on Iran.