BIS Should Expand Huawei Exemption for Standards-Setting Bodies to Entire Entity List, Industry Says

While industry welcomed the U.S. June decision to allow companies to more easily participate in standards-setting bodies in which Huawei is a member (see 2006160035), the administration should expand the rule to exempt all businesses on the Entity List, companies and trade groups said in comments last month. If the Bureau of Industry and Security does not expand the rule, companies will still be hampered at international standards bodies and could continue to cede technology leadership to China, they said.

Some groups said the interim rule, which allows companies to release certain export-controlled technology to Huawei in the context of standards-setting bodies, has created more questions than it addressed. The U.S. Chamber of Commerce said the rule has made it more difficult to engage with companies on the Entity List that are not Huawei because of the “specific exemption” awarded to the Chinese telecommunications equipment company. “The rule changes have resulted in unintended and largely avoidable consequences that have made it harder to engage companies on the entities lists,” the Chamber said in comments dated Aug. 14.

Qualcomm and Intel both said it makes no sense for the U.S. to carve out an exception for Huawei and not other companies on the Entity List. “Given the high level of concern the U.S. government has regarding Huawei, it would seem logical to conclude that other organizations would not likely pose a greater concern and could be treated in the same manner,” Intel said Aug. 17. Qualcomm said Aug. 12 that “there is no policy reason” for treating Huawei differently from other listed entities at standards bodies.

Many of the companies and trade groups asked BIS to make a blanket ruling that activities at standards bodies do not fall under the Export Administration Regulations. The Semiconductor Industry Association argued Aug. 17 that most of the “unpublished technology” shared at the bodies is “generally not sensitive from an export control perspective,” yet companies are constantly forced to limit their participation.

Companies are too often “scrambling to interpret” BIS guidance for what U.S. businesses can do at the bodies, the Telecommunications Industry Association said. While TIA said the agency’s June rule was a “step forward,” it came after “several previous steps backward” in which BIS “inadvertently took actions that sidelined U.S. participation” in the bodies. “The result,” the group said, “has been a blow to U.S leadership.” BIS declined to comment.