ANNOUNCEMENT 15 May 2019

When a company is named to the Entity List, the sale or transfer of American technology to that company requires a BIS license; that license may be denied if the sale or transfer would harm U.S. national security or foreign policy interests.

 

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising
Inception date: 17 May 2019 | Removal date: open ended
Still in force

Controls on commercial transactions and investment instruments

On May 15, 2019, the Bureau of Industry and Security (BIS) of the U.S. Department of Commerce concluded that Huawei Technologies Co. Ltd. is engaged in activities that are contrary to U.S. national security or foreign policy interest. As a consequence, BIS announced that it is adding this firm and its affiliates to the Entity List. When a company is named to the Entity List, the sale or transfer of American technology to that company requires a BIS license; that license may be denied if the sale or transfer would harm U.S. national security or foreign policy interests. The listing will be effective when published in the Federal Register.

The companies named to the Entity List are more typically those that have been found to violate trade controls on militarily critical technology, or to engage in "sanctions-busting" or other activities more closely related to security policy than to trade policy.

This decision is related to the issuance on that same day of President Trump’s “Executive Order on Securing the Information and Communications Technology and Services Supply Chain.” The order put in place a process that may lead to the blacklisting of specific firms, including import bans and other consequences, but did not name any specific countries or companies. There is widespread speculation that Huawei may be the principal target of that order, and its naming to the Entity List may be followed by similar action under the new executive order.

On August 19, 2019 BIS modified this policy by listing 46 additional Huawei affiliates on the Entity List. BIS also announced that it will extend the Temporary General License (TGL) authorizing specific, limited engagements in transactions involving the export, reexport, and transfer of items – under the Export Administration Regulations  – to Huawei and its non-U.S. affiliates which are subject to the Entity List. The continuation of the TGL is intended to afford consumers across America the necessary time to transition away from Huawei equipment, given the persistent national security and foreign policy threat. This license will be effective on August 19, 2019 and last an additional 90 days.

 

AFFECTED SECTORS

 
N/A