BIS Releases Licensing Data, Says It Revoked 8 Huawei-Related Licenses This Year

The Bureau of Industry and Security denied, revoked or didn't take action on about one-third of all license applications involving Chinese companies on the Entity List between 2018 and 2023, according to a snapshot of licensing data released by BIS July 2.

Between 2018 and 2023, BIS said, it reviewed 3,934 license applications that involved a China-based Entity Listed party, approving 2,641 licenses valued at about $335 billion during that time. The agency denied, revoked or returned a license application without action for 1,293 licenses valued at $545 billion.

It added that it has revoked eight additional licenses that are Huawei-related since the start of 2024, although BIS didn’t name the companies whose licenses were revoked.

BIS said it released a summary of the licensing data in response to a request from the House Foreign Affairs Committee (see 2303080024), and because it wanted to provide “additional information and context for this data.” A spokesperson for the committee’s Republican leadership said they received additional licensing data from BIS this week that hasn’t been publicly released by the agency.

Although the licensing data shows BIS approved a majority of the license applications it received for China-based companies on the Entity List, export control lawyers and BIS have said that's partly because most companies don’t apply for a license if they believe they will be denied (see 2110210073). BIS added that the value of approved licenses aren’t always accurate and are based on “good faith estimates” submitted by the exporter at the time of the application. “As a general matter, a substantial number of licenses are not fully utilized.”

The agency also stressed that many of those license approvals reflected licensing policies set in 2019 and 2020 for both Huawei and China’s Semiconductor Manufacturing International Corp., and BIS noted that it “enhanced” its countrywide controls for China in October 2022 and 2023 for certain advanced semiconductors and semiconductor manufacturing equipment (see 2310170055).

BIS said some approved applications related to Huawei involved exercise equipment, office furniture and “low-technology components” that the company would have been able to easily buy from other countries. The agency also said it has received “a number of applications” involving China’s Sichuan University, which is subject to a case-by-case license review policy for all items but which has been approved to receive various parts used in biotherapy treatments for tumors, or for infectious diseases and genetic diseases at the university’s West China Hospital Campus.

The agency added that when Huawei became subject to the BIS Entity List Foreign Direct Product rule in 2020, “that resulted in capturing foreign-made, mass-market consumer items over which BIS had not previously asserted jurisdiction.” BIS said “values associated with license applications increased exponentially.”

BIS said it received five license applications involving Chinese companies on the Entity List in 2018 compared to “a high of 1,751 in 2021, accounting for approximately 28 percent of all license applications to” China. The agency said this increase “was likely driven by” the fact that many more Chinese entities were added to the list, and because the additions of Huawei in 2019 and SMIC in 2020 “drove a substantial increase in the total number of license applications.”

“This is due to the size of these companies and their commercial activities, which resulted in a relatively significant volume of trade that became subject to a license requirement as a result of these Entity List actions,” BIS said.

The agency said the rise in China-related license applications “demonstrates that BIS has applied additional scrutiny overall to exports to the [People’s Republic of China] as these applications are for predominantly commercial items that are less sensitive than items subject to countrywide controls for the PRC.”

BIS has received criticism from lawmakers for not doing enough to stop sensitive exports to China. Rep. Michael McCaul, the top Republican on the House Foreign Affairs Committee, released lincensing data in 2021 (see 2110210073) and 2023 (see 2303060013) that showed the agency had approved billions of dollars worth of exports to Huawei, SMIC and other Chinese companies on the Entity List, and McCaul at the time said those numbers were too high.