ReutersMar 12, 2021 6:15:48 AM IS
By Karen Freifeld
(Reuters) – The Biden government this week changed the licenses for companies to sell to China’s Huawei Technologies Co Ltd, further preventing companies from supplying items that can be used with 5G devices.
The changes could disrupt existing contracts with Huawei that were signed under previous licenses that have now been changed, two of the sources said.
The measures show that the Biden administration is stepping up a tough line on exports to Huawei, the telecommunications equipment maker that has been blacklisted because of US national security concerns.
A US Department of Commerce spokeswoman declined to comment, saying the license information was confidential. A Huawei spokeswoman declined to comment.
The first export licenses were issued by the trading department after the company was added to the department’s trading blacklist in 2019. This week’s new terms make older licenses more consistent with stricter licensing guidelines implemented in the final days of the Trump administration.
In January, the Trump administration decided to deny 116 licenses with a total face value of $ 119 billion and approve only four licenses worth $ 20 million. This emerges from a document from the Department of Commerce that has been checked by Reuters. Most of the rejected people fell into three broad categories: storage, handset and other devices, and network applications.
Between 2019 and 2020, the administration approved licenses for companies to sell $ 87 billion worth of goods and technology to Huawei. Licenses are usually valid for 4 years.
While new restrictions on these licenses are hurting some suppliers, one source found that they also improve the playing field between companies, as some have obtained licenses under less restrictive guidelines.
Articles may not be used “with or in 5G devices” according to a revised license from Reuters that went into effect March 9. This is a broad interpretation that prohibits the article from getting into a 5G device even if it has nothing to do with 5G function.
Another amended license was not approved for use in military, 5G, critical infrastructure, corporate data centers, cloud or space applications effective March 8th.
The notice also states that certain elements must have a density of 6 gigabytes or less and other technical requirements.
Both revised licenses state that Huawei or customers must implement a parts control plan prior to export and provide inventory records to the US government upon request.
Corporations are blacklisted known as the Entity List due to national security and foreign policy concerns, and licenses to sell to them are generally subject to a probable denial standard.
But Trump had an inconsistent approach to Huawei, opening the door to more sales when he searched for a trade deal, but then fell more sharply as tensions over the coronavirus and Beijing’s crackdown on Hong Kong increased last year.
According to the January document released by Reuters, around 300 applications with a stated value of $ 296 billion were still pending. It is not clear how many of these were decided.
(Reporting by Karen Freifeld in New York; editing by Chris Sanders, Matthew Lewis, and Lincoln Feast.)
This story was not edited by Firstpost staff and is generated by automatic feed.
