Date
20 July 2019
Huawei will remain on the US Entity List, meaning US parts and components cannot be sold to the company without special licenses. Photo: Reuters
Huawei will remain on the US Entity List, meaning US parts and components cannot be sold to the company without special licenses. Photo: Reuters

US to approve sales it deems safe to blacklisted Huawei

The US government will issue licenses to companies seeking to sell goods to China’s Huawei where there is no threat to national security, Commerce Secretary Wilbur Ross said, leaving industry observers unsure about which products will pass muster.

Seeking to revive trade talks with China, President Donald Trump announced last month that American companies would be allowed to sell products to Huawei Technologies Co. Ltd., the world’s largest telecommunications equipment maker.

Trump’s comments came after the United States placed Huawei on the Commerce Department’s so-called Entity List in May over national security concerns. US parts and components generally cannot be sold to those on the list without special licenses.

While American chipmakers welcomed Trump’s announcement, many industry and government officials were confused about the new policy.

Speaking at a conference in Washington, Ross affirmed that Huawei would remain on the Entity List, meaning winning licenses would require overcoming a presumption of denial, and said the scope of items requiring licenses would not change. However, he opened the door to some approvals.

“To implement the president’s G20 summit directive two weeks ago, Commerce will issue licenses where there is no threat to US national security,” Ross said, referring to Trump’s announcement at the meeting of world leaders in Japan.

“Within those confines, we will try to make sure that we don’t just transfer revenue from the US to foreign firms,” he said.

After Huawei was added to the Entity List, the semiconductor industry lobbied the US government for carve-outs to sell nonsensitive items that Huawei could easily buy abroad, arguing that a blanket ban would harm American companies.

However, industry observers said Ross’ comments lacked the clarity and relief many hoped for after Trump’s announcement.

“The actual policy, of what is not going to endanger US security, is not clear,” Washington trade lawyer Doug Jacobson said. “The only way that industry can determine the line is by submitting [license] applications and knowing what types will be approved and which types will be denied.”

Separately, White House economic adviser Larry Kudlow said relaxed US government restrictions on Huawei could help the technology giant but would only be in place for a limited time.

Speaking at the same conference, Nazak Nikakhtar, Commerce’s assistant secretary for industry and analysis and nominee to lead the department’s Bureau of Industry and Security, said the agency hoped to have decisions soon on export license requests from companies seeking to sell to Huawei.

The US has accused Huawei of stealing American intellectual property and violating Iran sanctions.

It also has launched a lobbying effort to persuade US allies to keep Huawei out of next-generation 5G telecommunications infrastructure, citing concerns the company could spy on customers. Huawei has denied the allegations. Reuters

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CG

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