Biden Administration Adds New Limits on Huawei Suppliers

(Reuters) – The Biden administration this week changed licenses for companies to sell to China’s Huawei Technologies Co Ltd, further restricting companies from supplying items that can be used with 5G devices, the sources said.

FILE PHOTO: The Huawei logo is displayed on the headquarters building in Reading, UK, on ​​July 14, 2020. REUTERS / Matthew Childs / File Photo

The changes could disrupt existing contracts with Huawei that were agreed to under previous licenses that have now been changed, two of the sources said.

The actions show that the Biden administration is tightening a hard line on exports to Huawei, the telecoms equipment maker placed on the trade blacklist over US national security concerns.

A spokeswoman for the US Department of Commerce declined to comment, saying the licensing information is subject to confidentiality. A Huawei spokeswoman declined to comment.

The initial export licenses were granted by the Commerce Department after the company was placed on the department’s commercial blacklist in 2019. New terms this week make older licenses more consistent with older licensing policies. strict enforcement in the last days of the Trump administration.

In January, the Trump administration decided to deny 116 licenses with nominal values ​​totaling $ 119 billion, and would only approve four worth $ 20 million, according to a Commerce Department document reviewed by Reuters. Most of the people denied fell into three broad categories: memory, phone, and other network devices and applications.

Between 2019 and 2020, the administration approved licenses for companies to sell $ 87 billion worth of goods and technology to Huawei, according to the document. In general, licenses are valid for 4 years.

While the new restrictions on those licenses hurt some providers, one source noted, they also level the playing field between companies, as some received licenses under less restrictive policies.

According to a revised license accessed by Reuters, which took effect on March 9, the items cannot be used “with or on any 5G device,” a broad interpretation that prohibits the item from entering a 5G device even if it has nothing to do with 5G. March.

Another modified license was not authorized for use in military, 5G, critical infrastructure, enterprise data center, cloud or space applications, as of March 8.

The notice also says that certain items must have a density of 6 gigabytes or less, and other technical requirements.

Both revised licenses say that, 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 commercial blacklist, known as the “entity list,” for national security and foreign policy concerns, and licenses to sell to them generally face a standard of possible denial.

But Trump had an inconsistent approach to Huawei, opening the door to more sales when seeking a trade deal, but then dropped further as tensions began to rise over the coronavirus and Beijing’s crackdown on Hong Kong last year.

According to the January document seen by Reuters, some 300 applications with declared values ​​of $ 296 billion were still pending. It is unclear how many of them have been decided.

Reporting by Karen Freifeld in New York; Edited by Chris Sanders, Matthew Lewis, and Lincoln Feast.


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