The Bureau of Industry and Security (BIS) has added 38 Huawei affiliates to the Entity List, the agency said in its final rule, effective August 17. This imposes a license requirement for all items subject to Export Administration Regulations (EAR). In addition to this, BIS modified four existing Huawei Entity List entries.
BIS also refined a May amendment to its foreign-produced direct product (FDP) rule, which further restricts Huawei’s access to U.S. technology. This rule specifically targets Huawei’s acquisition of semiconductors that are a product of U.S. software. In a press release, the Department of Commerce clarified that the amendment refines the FDP rule by applying the control to transactions:
- Where U.S. software or technology is the basis for a foreign-produced item that will be incorporated into, or will be used in the “production” or “development” of any “part,” “component,” or “equipment” produced, purchased, or ordered by any Huawei entity on the Entity List.2) When any Huawei entity on the Entity List is a party to such a transaction, such as a “purchaser,” “intermediate consignee,” “ultimate consignee,” or “end-user.”
- These 38 new Huawei affiliates have been added to the Entity List because there is reason to believe they may be a threat to the national security or foreign policy interests of the U.S. It is probable that Huawei would use these affiliates to evade restrictions imposed by the Entity List.
The 38 additions to the Entity List are:
Huawei Cloud Computing Technology; Huawei Cloud Beijing; Huawei Cloud Dalian; Huawei Cloud Guangzhou; Huawei Cloud Guiyang; Huawei Cloud Hong Kong; Huawei Cloud Shanghai; Huawei Cloud Shenzhen; Huawei OpenLab Suzhou; Wulanchabu Huawei Cloud Computing Technology; Huawei Cloud Argentina; Huawei Cloud Brazil; Huawei Cloud Chile; Huawei OpenLab Cairo; Huawei Cloud France; Huawei OpenLab Paris; Huawei Cloud Berlin; Huawei OpenLab Munich; Huawei Technologies Dusseldorf GmbH; Huawei OpenLab Delhi; Toga Networks; Huawei Cloud Mexico; Huawei OpenLab Mexico City; Huawei Technologies Morocco; Huawei Cloud Netherlands; Huawei Cloud Peru; Huawei Cloud Russia; Huawei OpenLab Moscow; Huawei Cloud Singapore; Huawei OpenLab Singapore; Huawei Cloud South Africa; Huawei OpenLab Johannesburg; Huawei Cloud Switzerland; Huawei Cloud Thailand; Huawei OpenLab Bangkok; Huawei OpenLab Istanbul; Huawei OpenLab Dubai; and Huawei Technologies R&D UK
For questions, please reach out to Mohawk Global Trade Advisors.