The U.S. government has expanded trade sanctions against Huawei Technologies Co. Ltd. ("Huawei") to cover additional Huawei affiliates but also extended and modified a general license that authorizes otherwise forbidden activity relating to designated Huawei entities.
As described in our previous alert, the U.S. Department of Commerce's Bureau of Industry and Security ("BIS") placed Huawei and 68 Huawei non-U.S. affiliates in 26 countries on BIS's Entity List, effective May 16, 2019. In addition, BIS issued a temporary general license (the "TGL") covering certain transactions with Huawei and Huawei entities until August 19, 2019.
Effective August 19, 2019:
- BIS added another 46 non-U.S. affiliates of Huawei in 25 countries to the Entity List. As with previously designated Huawei entities, this action generally forbids anyone to supply items from the United States or that are otherwise subject to the U.S. Export Administration Regulations to the newly added entities. This action expanded the Huawei Entity List restraints to Huawei affiliates in countries such as India and Mexico.
- BIS extended the TGL through November 18, 2019. In addition, BIS modified and clarified the TGL in a variety of ways. For example, BIS clarified that authorized transfers to support continued operation of existing networks and equipment do not include transfers of equipment for general business purposes or for activities that are not in direct support of an existing network. BIS also specified that end devices such as general-purpose computing devices are not considered to be part of an existing network. Perhaps most importantly, BIS revised the TGL to require the exporter, reexporter or transferor to obtain a certification statement from the recipient designated Huawei entity prior to relying on the TGL. Previously, the transacting party was merely required to create its own record substantiating the validity of its reliance on the TGL.
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