Huawei Technologies Archives

On July 14, 2020, the United Kingdom announced that it will ban Huawei Technologies, Co. Ltd. (“Huawei”) equipment from its 5G network. Effective December 31, 2020, Telecoms operators in the UK can no longer purchase Huawei equipment and have until 2027 to remove Huawei technology from their networks, with broadband companies receiving an additional two years to do so. The older 2G, 3G, and 4G networks will not need to have existing Huawei equipment removed.

The UK’s decision arrives after UK intelligence determined that they could no longer be confident in the security of the new equipment provided by Huawei. This announcement marks a change in policy from six months ago, when UK Prime Minister Boris Johnson had previously agreed that Huawei could take up to a 35 percent share of the 5G market.

In response, U.S. Secretary of State Mike Pompeo tweeted that this decision by the UK’s decision “advances Transatlantic security in the [5G] era while protecting citizens’ privacy, national security, and free-world values.” Secretary Pompeo also announced that the U.S. Department of State will impose visa restrictions on Huawei employees, which, according to Secretary Pompeo, are meant to punish complicity in human rights abuses. Specifically, the new U.S. visa restrictions on Huawei employees allege that Huawei is an extension of the Chinese Communist Party’s “surveillance state” in the Xinjiang Uighur Autonomous Region.

Additionally, Huawei and 114 of its affiliate companies remain subject to extensive export restrictions due to their designation on the U.S. Commerce Department – Bureau of Industry and Security’s “Entity List” while the Commerce Department continues to finalize forthcoming “foreign adversary” rules which will likely restrict the use of Huawei equipment and services in various U.S. information and communications technology or services (“ICTS”) transactions (Husch Blackwell’s coverage of Huawei developments is consolidated at this link and we have covered the proposed “foreign adversary” ICTS rules here and here).

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Grant Leach is an Omaha-based partner with the law firm Husch Blackwell LLP focusing on international trade, export controls, trade sanctions and anti-corruption compliance.

Camron Greer is an Assistant Trade Analyst in Husch Blackwell LLP’s Washington D.C. office.

The U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) published a notice in the Federal Register announcing a rule change effective June 18, 2020, which amends the Export Administration Regulations (“EAR”) to allow for the release of certain technology to Huawei Technologies, Co., Ltd. and 114 of its non-U.S. affiliates designated on the Entity List without a license “if such release is made for the purpose of contributing to the revision or development of a ‘standard’ in a ‘standards organization.’”

Despite being added to the Entity List by BIS in 2019, Huawei and its foreign affiliates still participate in several international standards organizations in which U.S. companies also participate. BIS states in its notice “[a]s international standards serve as the building blocks for product development and help ensure functionality, interoperability, and safety of the products, it is important to U.S. technological leadership that U.S. companies be able to work in these bodies in order to ensure that U.S. standards proposals are fully considered.”

As a result of Huawei’s entity list designation, BIS has received questions regarding the applicability of the EAR in the context of standards-setting or development. On August 19, 2019, BIS issued a “General Advisory Opinion Concerning Prohibited Activities in the Standards Setting or Development Context When a Listed Entity is Involved”, which addressed the applicability of certain types of releases. With the issuance of this new interim final rule, that previous guidance has been rescinded.

The new rule removes certain licensing requirements imposed by the original listing and removes the need to determine the application of controls to those releases. The interim final rule revises ninety-three entries, which list Huawei and its 114 foreign affiliates by changing the text in the Licensing Requirement column from “For all items subject to the EAR (See §744.11 of the EAR)” to “For all items subject to the EAR (see § 744.11 of the EAR), EXCEPT for technology subject to the EAR that is designated as EAR99, or controlled on the Commerce Control List for anti-terrorism reasons only, when released to members of a ‘‘standards organization’’ (see § 772.1) for the purpose of contributing to the revision or development of a ‘‘standard’’ (see § 772.1).’’

According to the notice, the definition of a “standard” for the purpose of this rule can be found in the Office of Management and Budget (“OMB”) Circular A-119. BIS welcomes comments from interested parties on the impact of the rule change on or before August 17, 2020.

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Cortney O’Toole Morgan is a Washington D.C.-based partner with the law firm Husch Blackwell LLP. She leads the firm’s International Trade & Supply Chain group.

Grant Leach is an Omaha-based partner with the law firm Husch Blackwell LLP focusing on international trade, export controls, trade sanctions and anti-corruption compliance.

Camron Greer is an Assistant Trade Analyst in Husch Blackwell LLP’s Washington D.C. office.

UK to Ban Huawei Equipment from its 5G Network While U.S. Announces Visa Restrictions

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