On August 19, 2019, the Department of Commerce, Bureau of Industry and Security (BIS) continued its actions restricting access by Huawei and certain of its non-US affiliates to goods, software and technology that are subject to the Export Administration Regulations (EAR) by issuing two final rules related to Huawei’s Entity List designation.
The first of the final rules added 46 non-US affiliates of Huawei to the Entity List based on a concern that Huawei would use those affiliates to evade the Entity List restrictions. This addition brings the total number of non-US affiliates of Huawei subject to the Entity List restrictions to over 100. Although the rule will not be published until August 21, 2019, the restrictions are effective as of August 19, 2019.
The second of the final rules extends the Temporary General License (TGL) authorizing limited transactions with Huawei and its listed affiliates (originally set to expire August 19, 2019) for an additional 90 days through November 18, 2019. The final rule also makes certain updates to the TGL, including:
The two final rules do not expand the scope of restrictions applicable to the listed parties; a license remains required for the export, re-export or transfer of any good, software, or technology subject to the EAR to Huawei or any of its listed non-US affiliates, except in the limited circumstances in which the TGL is available. In general, the final rules largely maintain the status quo for an additional 90 days, albeit with certain new limitations and requirements under the TGL and the expansion of the universe of Huawei entities that are subject to those restrictions. Organizations that have been relying on the TGL and wish to continue to rely on the TGL through November 18 should ensure that their activities remain covered and that they obtain and maintain records as required under the TGL.
While the extent to which license applications will be submitted for any exports, re-exports or transfers not covered by the TGL is not entirely clear, it appears unlikely that such licenses will be issued. A presumption of denial remains in place for any license applications for the export, re-export or transfer of goods, software or technology that are subject to the EAR to Huawei or any of the listed non-US affiliates. Recent reporting in the Washington Post quotes the US Secretary of Commerce as saying that “no specific licenses are being granted for anything.”