
Horacio Villalobos / Corbis via Getty Images
The Key Takeaways
- China's Ministry of Commerce has put PVH and Illumina on its "unreliable entity" list.
- Two firms have been accused of harming Chinese businesses.
- Businesses on the list of unreliable entities could be subject to business restrictions, fines and other penalties.
When China announced the addition of Illumina and PVH, parent companies of Calvin Klein (both PVH), to its list of listed firms, shares in both fell. “unreliable entity” list.
The official Xinhua News Agency reported that the Ministry of Commerce has determined that both "have violated normal market trading principles, terminated regular trade with Chinese companies, and adopted discriminatory measures against Chinese companies, thus severely harming their legitimate rights and interests." The news site didn't give an explanation of what those two did to be singled out.
The Ministry of Commerce explained that the purpose of the unreliable entity list is for "safeguarding national sovereignty, security and development interests, maintaining fair and free international economic and trade order, protecting the legitimate rights and interests of enterprises, other organizations, and individuals of China."
The list may include import or export restrictions, fines and even the restriction of employees’ entry and exit from the country.
"We are surprised and deeply disappointed to learn of the decision from the Chinese Ministry of Commerce," PVH said in a statement provided to Investopedia. "In our 20 years of operating in China and proudly serving our consumers, as a matter of policy, PVH maintains strict compliance with all relevant laws and regulations and operates in line with established industry standards and practices. We will continue our engagement with relevant authorities and look forward to a positive resolution."
"Illumina has a long-standing presence in China, where we serve the local market through our advances in genomics that help improve human health," it said in a statement. "Wherever Illumina operates, we comply with all laws and regulations. This announcement is being evaluated with the aim of a finding a resolution. In the meantime, we are committed to continuing to serve global health."
PVH shares are down 1% from their previous lows in November 2023. Illumina’s shares fell 6%, and have fallen 12% since last year.
UPDATE—This story has been updated with company statements and the latest share price information.
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