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Commerce Dept. Adds Huawei Affiliates to Entity List

Aug. 17, 2020
The temporary general license for use of Huawei devices expired on Friday.

The Commerce Department took further steps in its long-running feud with Huawei Technologies on August 17 when it announced it would tighten restrictions on the Chinese telecommunications firm. Commerce Secretary Wilbur Ross said the new restrictions were necessary in order to prevent the company and its foreign affiliates from circumventing policies preventing the company from acquiring U.S.-made semiconductors.

The latest restriction adds 38 new Huawei affiliates in 21 countries to the Department’s Entity List, which restricts those companies from doing business with countries in the U.S. pending additional certification. According to the Commerce Department, the companies “present a significant risk of acting on Huawei’s behalf contrary to the national security or foreign policy interests of the United States” or allow Huawei to avoid its own Entity List restrictions.

“Huawei and its foreign affiliates have extended their efforts to obtain advanced semiconductors developed or produced from U.S. software and technology in order to fulfill the policy objectives of the Chinese Communist Party,” said Secretary Ross in a statement. In comments to Fox Business, Ross explained that Huawei had been using “third parties” to acquire U.S.-made semiconductors, in defiance of a ban on such transactions passed in May.

The addition of the new affiliates to the entity list is the latest salvo in the China-U.S. struggle over Huawei, which the United States says cooperates with the Chinese government on surveillance. The Chinese government and Huawei both say that Huawei is an independent company and that the United States is unfairly quashing its ability to compete.

In February, the Department of Justice indicted Huawei for conspiracy to violate RICO, the Racketeer Influenced and Corrupt Organization Act, in order to illegally supply surveillance equipment to Iran and North Korea. In May, the Department of Commerce issued policy to prevent companies using U.S. software and hardware to manufacture semiconductors from selling the parts to Huawei Technologies. In response, the Chinese government threatened to suspend purchases of Boeing airplanes and place certain U.S. technology firms on its own entity list.

Taiwan Semiconductor Manufacturing Co., which uses U.S. software to produce the computer chips, said it would cease all sales of semiconductors to Huawei after September 15, according to Reuters.

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