The United States said it is putting license requests from US companies that are seeking to export products to China’s Huawei Technologies “under the highest national security scrutiny”.
The Commerce Department said on Wednesday that as it reviewed applications, it was applying the “presumption of denial” standard associated with Entity Listed companies, Reuters reports, meaning applications are unlikely to be approved.
President Donald Trump surprised markets on Saturday with an announcement that US companies would be allowed to sell products to Huawei, which was placed on the so-called Entity List in May over national security concerns.
US chipmakers, which had been seeking a carve-out for exports of less sensitive technology to the world’s top telecoms technology maker, welcomed the news.
But four days after Trump’s announcement on the sidelines of the G20 in Japan, industry and government officials were uncertain what the new policy will be.
“It seems like nobody has made up their mind as to what the policy is and, as a result, nothing’s changing,” Douglas Jacobson, an international trade lawyer, told Reuters.
“There’s even less change than we anticipated if we’re still applying the presumption of denial,” Jacobson added, noting that he’s advising clients not to even apply for a license because it’s not worth their time and money under that review policy.
In an email to enforcement staff on Monday, seen by Reuters, John Sonderman, deputy director of the Office of Export Enforcement in the Commerce Department’s Bureau of Industry and Security, sought to clarify how agents should approach license requests by firms seeking approval to sell to Huawei.
All such applications should be considered on merit, he wrote, citing regulations that include the “presumption of denial” licensing policy.
White House trade adviser Peter Navarro said earlier this week that the government would allow “lower tech” chip sales that do not impact national security, echoing similar comments from National Economic Council Chairman Larry Kudlow.
Washington has accused Huawei of stealing American intellectual property and violating Iran sanctions.
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