Exports To Huawei Still Subject To ‘Highest Scrutiny’

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Easing Huawei blacklisting? Not really, as US Commerce Dept insists it will apply highest national security scrutiny

The United States government department responsible for controlling the exporting of US goods to Huawei has insisted the Chinese firm remains under the closest of scrunity.

This is despite US president Donald Trump earlier this week indicating that trade restrictions to the Chinese telecoms equipment maker would be relaxed, as part of an agreement with the Chinese president Xi Jinping to resume trade talks.

Huawei is currently on the US entity list, having been placed there ever since President Trump signed an executive order in May.

Entity list

The US Commerce Department then immediately added Huawei and 70 affiliates to its so-called Entity List, which bans them from buying parts and components from US companies without US government approval.

That decision makes it difficult, if not impossible, for Huawei, to sell certain products because of its reliance on US suppliers for essential silicon and other components.

The US Commerce Department however has given Huawei a 90-day stay of execution to the imposition of trade restrictions on Huawei – meaning it is still allowed to buy US goods until 19 August.

And despite what President Trump said to the Chinese President at the G20 meeting, the Commerce Department insisted it was reviewing license requests from US companies seeking to export products to Huawei “under the highest national security scrutiny” since the company is still blacklisted.

Highest scrunity

In an email to Reuters, the Commerce Department said that as it reviewed applications, it was applying the “presumption of denial” standard associated with Entity Listed companies, meaning applications are unlikely to be approved.

“It seems like nobody has made up their mind as to what the policy is and, as a result, nothing’s changing,” Douglas Jacobson, an international trade lawyer was quoted by Reuters as saying.

“There’s even less change than we anticipated if we’re still applying the presumption of denial,” Jacobson added, noting that he’s advising clients not to even apply for a license because it’s not worth their time and money under that review policy.

John Sonderman, deputy director of the Office of Export Enforcement in the Commerce Department’s Bureau of Industry and Security, reportedly sought to clarify how agents should approach license requests by firms seeking approval to sell to Huawei.

All such applications should be considered on merit, he reportedly wrote, citing regulations that include the “presumption of denial” licensing policy.

The Commerce Department spokesman said on Wednesday that the department intends to notify companies of decisions on export license applications once the review is complete.

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Author: Tom Jowitt
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