USA further tightens restrictions on Huawei, will not extend the temporary general license

The Trump administration in the USA has kept Huawei in its talons ever since it placed it on the Commerce Department’s “Entity List”. The move blocked Google from licensing GMS for new Huawei devices, which single-handedly humbled the competitiveness of the Chinese giant’s flagships. The U.S. Government did grant Huawei a temporary general license (TGL) that was renewed several times over the year, allowing Huawei to do limited business with U.S. companies. The last TGL extension just expired a few days ago, and as it turns, it will not be renewed. The U.S. Government is also further tightening the restrictions on Huawei.

According to the U.S. Department of State and U.S. Department of Commerce, the U.S. Department of Commerce will expand the restrictions that were imposed in May 2020, that blocked chip makers from supplying HiSilicon Kirin SoCs to Huawei without a special license.

“The Department of State strongly supports the Commerce Department’s expansion today of its Foreign Direct Product Rule, which will prevent Huawei from circumventing U.S. law through alternative chip production and provision of off-the-shelf (OTS) chips produced with tools acquired from the United States. This measure follows the more limited expansion of the Foreign Direct Product Rule in May, which Huawei has continuously tried to evade.

The Commerce Department also added 38 Huawei affiliates to its Entity List, which identifies foreign parties prohibited from receiving certain sensitive technologies and allowed Huawei’s Temporary General License (TGL) to expire. The United States has provided ample time for affected companies and persons – primarily Huawei customers – to identify and shift to other sources of equipment, software, and technology and wind-down their operations. Now that time is up.”

According to a report from Reuters, a new separate rule will stipulate that all companies on the economic blacklist will require a license when a company on the list acts as a purchaser, intermediate consignee, ultimate consignee, or end-user. Even further, the department is also adding addresses for four Huawei assembly locations on to the Entity List.

And to top it all off, the temporary general license that expired on Friday will not be extended. Parties will now need to submit license applications for transactions previously authorized under the TGL.

These new restrictions sound deeply impactful. Their complete impact will need to be assessed. We will keep you informed of further development on this matter.

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