As Huawei Questions Mount, Commerce Planning to Issue Guidance, FAQs

The Commerce Department is planning to issue multiple guidance documents on its blacklisting of Huawei Technologies due to the large number of questions from U.S. exporters, Commerce officials said during the Bureau of Industry and Security's annual export controls conference July 9-11 in Washington. Officials said the guidance will address the most common questions BIS has received from U.S. industries.

The announcement came during a conference that was billed as providing updates on “emerging technologies, strategic trade and global threats” but which was tilted toward Huawei clarification based on attendee interest.

“We've gotten a lot of questions and we’ve been funneling them up the chain for clearance,” said Hillary Hess, director of Commerce’s regulatory policy division in BIS. Commerce plans to issue multiple sets of Huawei FAQ’s on a “rolling basis” instead of releasing a one-time set of FAQs, Hess said. “I don't know when that will be,” she said, “but it is in the process.”

After BIS announced the addition of Huawei to its Entity List on May 16 -- followed by the release of a temporary general license and remarks from President Donald Trump at the Japan G-20 Summit that the U.S. would be loosening restrictions on Huawei -- BIS’s conference represented one of the first times U.S. industries could publicly question various Commerce officials about the designation.

During the conference, as panel discussions unrelated to Huawei neared their question-and-answer periods, audience members routinely pivoted to questions about the Chinese tech giant.

“There’s a couple Huawei questions. Surprise, right?” Kevin Kurland, director of the Office of Enforcement Analysis, said at one point while leading a July 9 panel.

But top Commerce officials also brought up Huawei unprompted, including Secretary Wilbur Ross, who began the conference by confirming that Commerce would not be removing Huawei from the Entity List. He said the agency would instead be approving more Huawei-related export licenses by reviewing applications for national security concerns only (see 1907090068). The next day, Acting Commerce Undersecretary for Industry and Security Nazak Nikakhtar said Commerce is trying to “mitigate as much of the negative impacts of the entity listing as possible” and hopes to have decisions on license applications “soon.”

During breakout sessions, Commerce officials fielded Huawei questions from compliance managers struggling to understand what their companies can and cannot sell to Huawei, and fielded questions seeking clarification on Ross’s and other Trump administration officials’ comments.

During one session, Kurland was asked a question that suggested the U.S. had not included all of Huawei’s global affiliates when Commerce published a list of the company’s 68 non-U.S. affiliates in the original notice in the Federal Register. Kurland pushed back on the suggestion, saying Commerce runs all entities “that we are aware about” through the agency’s End-User Review Committee. “If you have that list, bring it,” Kurland said.

But the BIS official also said companies have an obligation to research their customers even if they are not named on the Entity List. “If you believe that the party is going to be involved in converting the U.S.-origin item to a party on the Entity List, you cannot proceed with that transaction,” Kurland said. “Even though this Huawei-specific affiliate may not be on the Entity List, you need to look behind who is the actual end-user and evaluate whether you need to come in for a license under the current Huawei Entity List requirements.”