Huawei, 70 affiliates placed on US trade blacklist

May 16, 2019 09:03
Washington says it has reasonable basis to conclude that Huawei is 'engaged in activities that are contrary to U.S. national security or foreign policy interests.' Photo: Reuters

The US Commerce Department said on Wednesday that it is adding Huawei Technologies and 70 affiliates to its so-called “Entity List”, a move that bans the Chinese telecoms group from buying parts and components from American companies without Washington's approval, Reuters reports.

Under the order that will take effect in the coming days, Huawei will need a US government license to buy American technology.

Commerce Secretary Wilbur Ross said in a statement that President Donald Trump backed the decision that will “prevent American technology from being used by foreign owned entities in ways that potentially undermine U.S. national security or foreign policy interests.”

The dramatic move comes as the Trump administration has aggressively lobbied other countries not to use Huawei equipment in next-generation 5G networks and comes just days after the Trump administration imposed new tariffs on Chinese goods amid an escalating trade war.

The Commerce Department said the move comes after the US Justice Department unsealed an indictment in January of Huawei and some entities that said the company had conspired to provide prohibited financial services to Iran.

The department said it has a reasonable basis to conclude that Huawei is “engaged in activities that are contrary to U.S. national security or foreign policy interest.”

Trump earlier in the day signed an executive order barring US companies from using telecoms equipment made by firms deemed to pose a national security risk.

While the order did not specifically name any country or company, US officials have previously labeled Huawei a “threat” and actively lobbied allies to not use Huawei network equipment in next-generation 5G networks.

In March 2016, the Commerce Department added China's ZTE Corp to the entity list over allegations it organized an elaborate scheme to hide its re-export of US items to sanctioned countries in violation of US law.

The restrictions prevented suppliers from providing ZTE with US equipment, potentially freezing the Huawei rival’s supply chain, but they were short-lived.

The US suspended the restrictions in a series of temporary reprieves, allowing the company to maintain ties to American suppliers until it agreed to a plea deal a year later.

In August, Trump signed a bill that barred the US government from using equipment from Huawei and ZTE.

-- Contact us at [email protected]