Government Contracts BIS Adds 46 More Huawei Affiliates to the Entity List
Tuesday, September 17, 2019

BIS Adds 46 More Huawei Affiliates to the Entity List

By Government Contracts Editorial Staff

The Bureau of Industry and Security has issued two final rules amending the Export Administration Regulations. The rules build on a May 16, 2019, final rule (¶72,750.451) adding Huawei Technologies Co., Ltd., and 68 of its non-U.S. affiliates, to the Entity List (Supplement No. 4 to EAR Part 744). BIS issued that rule because the End-User Review Committee found reasonable cause to believe Huawei engaged in activities determined to be contrary to the national security or foreign policy interests of the United States. These changes to the Entity List imposed an EAR licensing requirement regarding the export, reexport, or transfer (in-country) of any item subject to the EAR on any of these 69 Huawei entities. However, another May 2019 rule, (¶72,750.452) created a 90-day temporary general license at Supplement No. 7 to EAR Part 744 that partially restored licensing requirements and policies for exports, reexports, and transfers (in-country) to Huawei and the 68 other entities.

Significant Risk. In the first new rule (¶72,750.460), BIS adds 46 additional non-U.S. Huawei affiliates to the Entity List because they also pose a significant risk of involvement in activities contrary to the national security or foreign policy interests of the U.S. The rule adds 19 of the 46 affiliated entities to the existing entry for Huawei and the 27 others under new, separate entries. Further, the rule modifies the existing entries for Huawei and three Huawei affiliates in China by moving the three affiliates under the entry for Huawei instead of continuing to list them under separate entries, and by adding one alias and four addresses to the Huawei entry. The rule also modifies entries for five other existing entries for Huawei affiliates in China, Belgium, and Brazil. This rule went into effect August 19, 2019.

Temporary General License Extended. The other new rule (¶72,750.459) extends the temporary general license created for Huawei through November 18, 2019, and makes certain clarifying changes to the authorized transactions under the temporary general license to improve public understanding. This rule also revises the temporary general license by requiring that the exporter, reexporter, or transferor obtain a certification statement from the pertinent Huawei entity prior to using the temporary general license. The rule makes a conforming change to EAR 762.2. This final rule is effective August 19, 2019, through November 18, 2019, except for two amendatory instructions, which are effective August 19, 2019.

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