No relief for Huawei: Biden administration amends licenses to restrict supply further

By Sayujya S, Desk Reporter
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The US administration led by President Joe Biden has amended licenses for companies to sell to China’s Huawei Technologies, further restricting companies from supplying items that can be used with 5G devices.

According to sources, the changes could affect existing contracts with Huawei that were agreed upon under previous licenses.

The actions show that the Biden administration is reinforcing control over exports to Huawei, the telecommunications equipment maker which was placed on the US trade blacklist over national security concerns.

The initial export licenses were granted by the US Commerce Department after the company was placed on the department’s trade blacklist in 2019. This week’s new conditions make older licenses more consistent with tougher licensing policies implemented in the last few days of the Trump administration.

Trump’s moves

In January this year, the Trump administration decided it would deny 116 licenses with face values totaling $119 billion, and only approve four worth $20 million, according to a Commerce Department document. Between 2019 and 2020, the administration approved licenses for companies to sell $87 billion worth of goods and technology to Huawei, a document showed. Licenses are generally applicable for 4 years.

Experts note that while new restrictions on those licenses hurt some suppliers they also level the playing field between companies, since some received licenses under less restrictive policies.

Revised licenses

According to one revised license, which took effect March 9th, items may not be used “with or in any 5G devices,” an interpretation that prohibits the item from going into a 5G device even if it has nothing to do with 5G functioning.

Another amended license, effective from March 8, was not authorized for use in military, 5G, critical infrastructure, enterprise data centers, cloud or space applications. The notice also says that certain items must have a density of 6 gigabytes or less, and other technical requirements.

Both revised licenses say, prior to export, Huawei or customers must implement a parts control plan and make inventory records available to the US government upon request.

Trade blacklist

Companies are placed on the trade blacklist, known as the “entity list,” over national security and foreign policy concerns, and licenses to sell to them generally face a standard of likely denial.

But Former President Mr. Trump had an inconsistent approach to Huawei, opening the door to more sales when he was seeking a trade deal but then coming down harder as tensions began rising over the coronavirus and China’s controlling actions over Hong Kong last year.

Related: Huawei loses leadership in Chinese market due to US sanctions