Arrow Electronics says that US trade curbs on its Chinese affiliates are being reversed

By Karen Freifeld

(Reuters) -U.S.-based electronic components distributor Arrow Electronics said on Saturday the U.S. government was reversing trade restrictions placed on Arrow’s China-based affiliates for facilitating the sale of U.S. components found in weaponized drones used by Iran-backed groups like the Houthis.

Arrow (China) Electronics Trading Co and another Arrow entity with six aliases in Hong Kong were added to the Commerce Department’s Entity List on October 8 in a Federal Register posting.

Licenses are required to export goods and technology to companies on the list and are likely to be denied. Firms are placed on the list over U.S. national security or foreign policy interests.

On October 8, Commerce said that drones operated by Iran-backed groups and their debris recovered in the Middle East since 2017 had U.S. components traced to sales tied to these Arrow-related entities.

Arrow said on Saturday the Commerce Department told it the department would soon publish the reversal in the U.S. Federal Register and sent a letter Friday removing the restrictions in the meantime.

“We have received official communication from the U.S. Commerce Department,” Arrow spokesman John Hourigan said in an email. “Arrow is authorized to resume shipping to and from these entities under the same conditions that applied prior to October 8.”

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

Hourigan said the company operates in compliance with all laws and regulations. Centennial, Colorado-based Arrow Electronics had global 2024 sales of $28 billion.

Hourigan said that Arrow Electronics (Hong Kong) Co. Ltd, which he described as a subsidiary when it was added to the Entity List, was not actually affiliated with Arrow Electronics.

However, the six aliases tied to the Hong Kong company in the Federal Register posting are affiliated with Arrow and, the company said, would be removed from the Entity List.

(Reporting by Karen Freifeld; Editing by Cynthia Osterman)