The United States will extend a reprieve given to Huawei Technologies that permits the Chinese firm to buy components from U.S. companies to supply existing customers, but also moved to add more than 40 of Huawei’s units to its economic blacklist.
The Bureau of Industry and Security (BIS) of the U.S. Department of Commerce on Monday identified 46 additional Huawei Technologies affiliates that require inclusion on the Entity List. Since May, the Department has added over one hundred persons or organizations to the Entity List in connection to Huawei. The new restrictions on these affiliates are effective today, August 19th.
BIS has also announced that it will extend the Temporary General License (TGL) authorizing specific, limited engagements in transactions involving the export, reexport, and transfer of items – under the Export Administration Regulations (EAR) – to Huawei and its non-U.S. affiliates which are subject to the Entity List. This license will be effective on August 19, 2019 and last an additional 90 days.
The 90-day extension “is intended to afford consumers across America the necessary time to transition away from Huawei equipment, given the persistent national security and foreign policy threat,” the Commerce Department said in a statement on Monday.
“As we continue to urge consumers to transition away from Huawei’s products, we recognize that more time is necessary to prevent any disruption,” said Secretary of Commerce Wilbur Ross. “Simultaneously, we are constantly working at the Department to ensure that any exports to Huawei and its affiliates do not violate the terms of the Entity Listing or Temporary General License.”
Outside of the scope of the TGL, any exports, reexports, or in-country transfers of items subject to the EAR will continue to require a license granted after a review by BIS under a presumption of denial.
Huawei was added to the Entity List after the Department concluded that the company is engaged in activities that are contrary to U.S. national security or foreign policy interests, including alleged violations of the International Emergency Economic Powers Act (IEEPA), conspiracy to violate IEEPA by providing prohibited financial services to Iran, and obstruction of justice in connection with the investigation of those alleged violations of U.S. sanctions, among other illicit activities.
Out of $70 billion that Huawei spent buying components in 2018, some $11 billion went to U.S. companies.