Huawei Gets Another Reprieve from the U.S.

Article By : Dylan McGrath

Commerce Department extends for three months the temporary license program that allows the Chinese telecommunications giant to buy components from U.S. suppliers despite being blacklisted.

SAN FRANCISCO – The U.S. again granted Huawei Technologies a reprieve, extending by 90 days the temporary license program that allows the Chinese telecommunications giant to buy chips and other components from U.S. suppliers.

The U.S. Commerce Department, which announced the extension Monday, said the temporary general license was being extended "to afford consumers across America the necessary time to transition away from Huawei equipment, given the persistent national security and foreign policy threat."

The Trump Administration in May added Huawei to its "entity list," blacklisting the company from doing business with U.S. companies due to concerns about Huawei's affiliation with Chinese intelligence services. Huawei has long been suspected by U.S. lawmakers and intelligence officials of ties to the Chinese government and the potential for Huawei's technology to be used for espionage.

Huawei Ban Could Come Back to Bite U.S.

The ban is widely expected to have a crippling effect on Huawei, which incorporate chips from U.S. companies in much of its infrastructure equipment and smartphone handsets. The Commerce Department on Monday also added 46 additional Huawei affiliates to the entity list.

The temporary general license, which was first announced in May, just days after Huawei was blacklisted, authorizes "specific, limited engagements in transactions involving the export, reexport, and transfer of items to Huawei and its non-U.S. affiliates on the entity list, according to the Commerce Department.

“As we continue to urge consumers to transition away from Huawei’s products, we recognize that more time is necessary to prevent any disruption,” said Wilbur Ross, secretary of commerce, in a statement. “Simultaneously, we are constantly working at the department to ensure that any exports to Huawei and its affiliates do not violate the terms of the entity listing or temporary general license.”

The semiconductor industry has lobbied the Trump Administration heavily to make exceptions to the export restrictions on Huawei, particularly involving less critical technologies were they argue there is no threat to national security. Chip industry insiders were also critical of the terms of the general temporary license when it was announced in May, with many suggesting it was too vague and too restrictive.

John Neuffer
John Neuffer

On Monday, Semiconductor Industry Association (SIA) CEO John Neuffer said through a statement that the SIA continues to urge the administration to "take prompt action on license approvals where there is no nexus to national security." Neuffer noted that President Trump said at the G-20 meeting in May, that U.S. companies should be allowed to sell products to Huawei as long as the sale does not negatively impact U.S. national security.

“While we are reviewing the announcement today and its implications for the semiconductor industry, we urge the Commerce Department to expedite the review, approval, and issuance of licenses for sales of commercial products that do not raise national security concerns, particularly for items that can be easily substituted by foreign competition not subject to the entity listing," Neuffer said.

The Reuters news service initially reported last week that the Commerce Department would extend the temporary general license to allow U.S. companies to continue selling to Huawei. However, Trump said over the weekend that there would be no extension to the general license.

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