The US Government Tightens Restrictions On Huawei

Huawei Logo Dec 3 2018 AH
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The Trump administration is further tightening its restrictions on Chinese telecommunications giant Huawei. The United States Department of Commerce on Monday issued new regulations and updates to restrictions announced in May this year.

Earlier in May, the administration announced several amendments to the foreign-produced direct product (FDP) rules that prevented Huawei access to US-based technology. Essentially, the restrictions prevented the Chinese company from obtaining semiconductors without a special license. This includes any chips that use American software or technology, whether they are produced domestically or by foreign firms.

However, Huawei may have been able to exploit some loopholes in those rules, wherein it was able to do business with some third-party chip designers using American technology. The new rules attempt to address any such loopholes that may have existed.

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"This amendment further restricts Huawei from obtaining foreign-made chips developed or produced from US software or technology to the same degree as comparable US chips," the Department of Commerce said in a press release. The new amendment "refines the FDP rule by applying the control to transactions."

It bars Huawei, or any of its affiliates in the US government’s Entity list, from involving as a "purchaser, intermediate consignee, ultimate consignee, or end-user" in a transaction of any foreign-produced item that incorporates American software or technology in the "production or development of any part, component, or equipment."

US Commerce Department tightens restrictions, adds more Huawei affiliates to the Entity List

In addition to making amendments to the FDP rules, the United States Department of Commerce has also added 38 new Huawei affiliates across 21 countries to the Entity List. The administration has also modified four existing Huawei Entity List entries. Reports say a total to 152 Huawei affiliates are now in that economic blacklist. Huawei was first added to the list back in May 2019.

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These affiliates "present a significant risk of acting on Huawei’s behalf contrary to the national security or foreign policy interests of the United States," an official statement reads.

The US government had issued Huawei a Temporary General License (TGL) allowing it to work with Google for some time. This made it possible for the company to push updates for Google apps and services on its older, Google-certified phones.

The license expired recently. The United States Department of Commerce had in past renewed the license a few times. However, there are no signs of this happening again. If Huawei doesn't get another extension, it may have to completely do away with Google Mobile Services on its phones.

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That said, the company has already replaced GMS with Huawei Mobile Services (HMS) on its newer smartphones. That appears to be the only way forward for the beleaguered Chinese giant.