Huawei's Future on the Entity List

Feb. 9, 2021

BIS first put Huawei Technologies Co., Ltd. (Huawei) and many of its non-U.S. affiliates on the Entity List in May of 2019, on the basis that BIS believed Huawei and affiliates engage in activities contrary to U.S. national security. Generally, because Huawei is on the Entity List there is a license requirement (supplemental to those found elsewhere in the Export Administration Regulations (EAR)) to export, reexport, or transfer (in-country) any item subject to the EAR to Huawei or its identified affiliates. These license applications are reviewed under a presumption of denial. We have covered the additional actions aimed at restricting Huawei including changes to EAR controls for Huawei and specific Foreign Direct Product Rule guidance.

On January 29, White House Press Secretary Jen Psaki indicated Biden administration is reviewing all national security measures put in place by the Trump administration. This would include U.S. sanctions against Huawei which were based on national security concerns. Ms. Psaki also stated earlier in the week that “untrusted vendors” like Huawei pose a threat to U.S. national security, suggesting that the Biden administration would not necessarily reverse actions targeting the Chinese company.

As expected, Huawei’s future on the Entity List was a key topic during the Senate confirmation hearing for Department of Commerce secretary nominee, Gina Raimondo. When specifically asked whether she would remove Huawei from the Entity List, she said she would “review the policy, consult with you, consult with industry, consult with our allies and make an assessment as to what's best for American national and economic security.”

Some Republicans have been openly unsatisfied with this non-committal response. Marco Rubio, Ben Sasse, and Tom Cotton wrote a letter requesting that Raimondo clarify if she would remove Huawei from the Entity List under any circumstances. They point out that, “The company has not changed alongside the U.S. presidency.”

Although she did not make specific commitments regarding Huawei, Raimondo did criticize China’s “anti-competitive” trade practices and “atrocious human rights abuses.” She also said Commerce will continue to control exports on sensitive items destined for China and pledged to take “aggressive” action in response to unfair trade practices. “China’s actions have been anticompetitive,” she added, saying she would use all available tools to “level the playing field.”

While the future of Huawei on the Entity List is uncertain, the country’s national security concerns with respect to Huawei and China remain strong. If you have questions or concerns about how these policies may impact your organization, please contact an attorney at Barnes, Richardson & Colburn LLP.