The U.S. Department of Commerce is reducing its sanction in Huawei, less than a week after it placed the company on its Entity List.
The Department of Commerce said in a statement that it would issue a Temporary General License (TGL) amending the Export Administration Regulations (EAR) to authorize specific, limited engagement in transactions involving the export, reexport, and transfer of items – subject to the EAR – to Huawei Technologies Co. Ltd. and its sixty-eight non-U.S. affiliates, which were added to the Bureau’s Entity List on May 16, 2019. This license will be effective on May 20, 2019 and lasts 90 days.
“The Temporary General License grants operators time to make other arrangements and the Department space to determine the appropriate long term measures for Americans and foreign telecommunications providers that currently rely on Huawei equipment for critical services,” said Secretary of Commerce Wilbur Ross. “In short, this license will allow operations to continue for existing Huawei mobile phone users and rural broadband networks.”
The Temporary General License authorizes certain activities necessary to the continued operations of existing networks and to support existing mobile services, including cybersecurity research critical to maintaining the integrity and reliability of existing and fully operational networks and equipment. Exporters will be required to maintain certifications, to be made available when requested by BIS, regarding their use of the TGL. With the exception of the transactions explicitly authorized by the TGL, any exports, reexports, or in country transfers of items subject to the EAR will continue to require a special license granted after a review by BIS under a presumption of denial. The Department will evaluate whether to extend the TGL beyond 90 days.
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.
The Bureau of Industry and Security’s mission is to advance U.S. national security and foreign policy objectives by ensuring an effective export control and treaty compliance system and promoting continued U.S. strategic technology leadership. BIS is committed to preventing U.S.-origin items from supporting Weapons of Mass Destruction (WMD) projects, terrorism, or destabilizing military modernization programs.
As a result of the ban, Google Inc. announced yesterday that it has banned Huawei from its Android platform. The latest exemptions will not change the Google ban but it is a temporary relieve to Huawei and global markets.