Commerce secretary confirms U.S. firms can sell to Huawei, with conditions

Since 2017, the U.S. has added 182 companies to the Entity List, including 49 Chinese companies. (Pixabay)

U.S. Department of Commerce Secretary Wilbur Ross on Tuesday said the U.S. would grant licenses to U.S. companies that sell technology to Huawei Technologies if the sales don’t put national security at risk.

His comments provided a little more clarity after President Trump’s meeting with Chinese President Xi Jinping at the G20 summit, where Trump made the surprise announcement that U.S. companies could sell their equipment to Huawei where there’s “no great national security problem with it.”

“To implement the President’s G-20 Summit directive two weeks ago, Commerce will issue licenses where there is no threat to U.S. national security,” Ross reiterated at the Bureau of Industry and Security (BIS) annual conference on export controls and security.  “Within those confines we will try to make sure that we don’t just transfer revenue from the U.S. to foreign firms. Huawei itself remains on the Entity List, and the announcement does not change the scope of items requiring licenses from the Commerce Department, nor the presumption of denial.”

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He added that ZTE is another example of BIS’s strong enforcement activities. Because of the department’s action, ZTE is the most monitored corporation in BIS history, he said. ZTE has a full-time Commerce monitor and a full-time court monitor policing its affairs, in addition to record-breaking fines.

Separately, at a CNBC event on Tuesday, Larry Kudlow, director of the White House National Economic Council, said with respect to the private markets, the U.S. had “opened the door—relaxed a bit, the licensing requirements from the Commerce Department” where there are no national security consequences.

The U.S. government isn’t going to be purchasing any Huawei products, but some of the U.S. chip companies would be permitted to sell on a limited basis to Huawei. “We are opening that up for a limited time period,” he added.

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The Financial Times noted that it’s still unclear if companies such as Intel will be allowed to sell programmable chips used in 5G mobile networks, or if those products will be deemed sensitive to national security. Other companies, such as Google, have taken advantage of a 90-day reprieve for companies to update existing products.