The U.S. tightens its restrictions on Huawei – limits access to technology

The Bureau of Industry and Security (BIS), in the Department of Commerce, says it will expand its restrictions on the Chinese telecommunications company which would inhibit Huawei from obtaining technology without a special license; this would also include items produced domestically and abroad from using U.S. technology and software. In addition, BIS added another 38 Huawei affiliates to the Entity List. BIS also imposed license requirements on any transaction involving items subject to Commerce export control jurisdiction where a party on the Entity List is involved, such as when Huawei – or other Entity List entities – acts as a purchaser, intermediate, or end user. These actions are aimed at prevent Huawei’s attempts to circumvent U.S. export controls to obtain electronic components developed or produced using U.S. technology, an update from the Department of Commerce reads. In May 2020, BIS amended the longstanding foreign-produced direct product (FDP) rule to target Huawei’s acquisition of semiconductors that are the direct product of certain U.S. software and technology. This amendment further refines the FDP rule by applying the control to transactions where U.S. software or technology is the basis for a foreign-produced item that will be incorporated into the production or development of any “part,” “component,” or “equipment” produced, purchased, or ordered by any Huawei entity on the list. This amendment further restricts Huawei from obtaining foreign made chips developed or produced from U.S. software or technology to the same degree as comparable U.S. chips. “Huawei and its foreign affiliates have extended their efforts to obtain advanced semiconductors developed or produced from U.S. software and technology in order to fulfill the policy objectives of the Chinese Communist Party,” says Commerce Secretary Wilbur Ross, in the press release. “As we have restricted its access to U.S. technology, Huawei and its affiliates have worked through third parties to harness U.S. technology in a manner that undermines U.S. national security and foreign policy interests. This multi-pronged action demonstrates our continuing commitment to impede Huawei’s ability to do so.”