Chinese pharmaceutical services provider WuXi AppTec said it had been removed from a US Department of Defense's list of companies allegedly linked to China's military on Tuesday, following a legal challenge that resulted in a US federal court blocking enforcement of the designation.

In a filing to the Hong Kong Stock Exchange on Nov 10, the company said it was informed on Nov 9 that the US had decided to remove it from the list of Chinese military companies under Section 1260H of the 2021 National Defense Authorization Act.

The decision means WuXi AppTec will no longer face further adverse consequences from its inclusion on the list, the company said, adding that it would continue serving customers and supporting the development of medicines that save and improve patients' lives.

The company was added to the Pentagon's updated Section 1260H list on June 8, along with several other Chinese companies. The US Defense Department cited alleged indirect ownership by China's State-owned Assets Supervision and Administration Commission and affiliations with China's defense industry regulator and the People's Liberation Army.

WuXi AppTec rejected the designation and filed a lawsuit against the Pentagon in the US District Court for the District of Columbia on June 11, arguing that the decision was erroneous and unsupported by facts.

On Aug 7, US District Judge James Boasberg granted the company's motion for a preliminary injunction, barring the Pentagon from enforcing the designation while the legal proceedings continued.

In his ruling, Boasberg questioned the department's interpretation of evidence used to establish the company's alleged links to Chinese State-owned and military entities. He also highlighted the commercial repercussions of the designation, noting that some customers and suppliers had terminated contracts or ended long-standing partnerships.

The Pentagon's decision to remove the company on Nov 9 was made in compliance with the court's order granting the preliminary injunction, according to the company's latest announcement.

The Section 1260H list identifies companies that the US Defense Department considers to be linked to China's military. Inclusion does not automatically impose sanctions or prohibit ordinary commercial operations in the United States, but it restricts the Pentagon's procurement dealings with listed companies and can create additional compliance concerns for their business partners.

WuXi AppTec provides contract research, development, and manufacturing services to the global pharmaceutical and biotechnology industries, supporting drug discovery, development, and production.

Source: China Daily