The Biden administration this week amended licences for companies to sell to China’s Huawei Technologies, further restricting companies from supplying items that can be used with 5G devices, sources said.
The changes could disrupt existing contracts with Huawei that were agreed upon under previous licences that have now been changed, two of the sources said.
The actions show the Biden administration is reinforcing a hard line on exports to Huawei, the telecommunications equipment maker placed on the trade blacklist over US national security concerns.
A US commerce department spokeswoman declined to comment, saying the licensing information is subject to confidentiality. A Huawei spokeswoman declined to comment.
The initial export licences were granted by the commerce department after the company was placed on the department’s trade blacklist in 2019. This week’s new conditions make older licences more consistent with tougher licensing policies implemented in the waning days of the Trump administration.
Restrictions
In January, the Trump administration decided it would deny 116 licences with face values totalling US$119-billion, and only approve four worth $20-million, according to a commerce department document reviewed by Reuters. Most of those denied fell into three broad categories: memory, handset and other devices, and network applications.
Between 2019 and 2020, the administration approved licences for companies to sell $87-billion worth of goods and technology to Huawei, the document said. Licences are generally good for four years.
While new restrictions on those licences hurt some suppliers, one source noted, they also level the playing field between companies, since some received licences under less restrictive policies.
According to one revised licence seen by Reuters, which took effect on 9 March, items may not be used “with or in any 5G devices”, a broad interpretation that prohibits the item from going into a 5G device even if it has nothing to with 5G functioning.
Another amended licence was not authorised for use in military, 5G, critical infrastructure, enterprise data centers, cloud or space applications, effective 8 March. The notice also says that certain items must have a density of 6GB or less, and other technical requirements.
Both revised licences say, prior to export, Huawei or customers must implement a parts control plan and make inventory records available to the US government upon request.
Companies are placed on the trade blacklist, known as the “Entity List”, over national security and foreign policy concerns, and licences to sell to them generally face a standard of likely denial. But Trump had an inconsistent approach to Huawei, opening the door to more sales when he was seeking a trade deal but then coming down harder as tensions began rising over the coronavirus and Beijing’s crackdown in Hong Kong last year.
According to the January document seen by Reuters, some 300 applications with stated values of $296-billion were still pending. It’s not clear how many of those have been decided. — Reported by Karen Freifeld in New York, (c) 2021 Reuters
