Huawei Restrictions, TikTok EOs, Prove 'Bold, Decisive Action' Against China: Ross

The Trump administration “is committed to bold, decisive action” against China that protects U.S. national and economic security interests, Commerce Secretary Wilbur Ross said during a virtual Bureau of Industry and Security conference on Sept. 2. He cited as evidence BIS' s additional export restrictions on Huawei (see 2008170029) and President Donald Trump’s Aug. 6 executive order banning U.S. transactions with the parent companies of TikTok and WeChat. “We each must remain alert to China’s malign behavior and that of other foreign entities that seek our sensitive technologies to damage our economic and national security,” Ross said. “China is a capable, effective and adaptable adversary with unconstrained resources, who regularly uses our American freedom and rules-based norms to advance its goal of dominating global markets.”

The new restrictions on Huawei “directly impact” the company’s “ability to work through third parties to harness advanced U.S. technology to meet the Chinese Communist Party’s objectives, and they will level the playing field by ensuring that both U.S. and foreign companies must receive the Commerce Department license to sell covered products to Huawei, Ross said. The TikTok/WeChat ban is necessary because the app’s parent companies “are in China, and these mobile apps collect personal and proprietary information that constitutes possible threats to our national security, foreign policy and economy.” TikTok parent ByteDance is suing the administration to block the EO from taking effect later this month (see 2008240031).

Ross said that in 2019, BIS closed 38 administrative matters, three relating to boycotts and 35 on export controls. He said companies were fined with $18 million in civil penalties, and there were 36 arrests, and $1.2 million in criminal fines. He said only vigilance will allow the U.S. to maintain its technological edge.

Acting Undersecretary for Industry and Security Cordell Hull also highlighted recent entity list actions during his remarks. The agency added 38 more Huawei entities to the list, resulting in 153 Huawei affiliates now on the entity list, he said. “We also imposed license requirements on any transaction to any party on the entity list, where the listed party is the purchaser, the intermediate consignee, the ultimate consignee or an end user,” Hull said. “While not Huawei-specific, that change to the entity list will ensure that we are approaching this in a broad comprehensive way. I would also note that some of these have in particular entity listings going back several years.”

Since January 2017, “in addition to the Huawei listing, BIS has added more than 450 parties to the entity list,” which now has more than 1,400 entities, he said. A good number of those listings are based in China and meant to “ensure that commercial entities are not using U.S. technology to repress the human rights of others,” Hull said. It is “imperative that the U.S. government counter China's program of forced labor for the Uighurs,” he said.

Hull also said the department has processed more than 12,300 export license applications since mid-March. “The coronavirus has introduced a number of challenges that have forced us to reassess and revamp business processes, as well as adjusting work-life balance,” he said. “We’ve done that all the while, while implementing some of the most significant regulations in recent BIS memory.” That includes the “transfer of small firearms and ammunition from the jurisdiction” of the State Department to Commerce (see 2006160040). “In that time, we’ve issued more than 3,800 licenses, with a value exceeding $6 billion,” he said. While Hull and Ross spoke on the record for the event, BIS said the names and affiliations of the government employees who spoke during the other conference sessions could not be used.