The Federal Register notice filed by the Department of Commerce’s Bureau of Industry and Security (BIS) to be published on Tuesday, May 21, 2019, indicates that the U.S. government has added Huawei and 68 of its non-U.S. affiliates to the Entity List because BIS has found that “there is reasonable cause to believe that Huawei Technologies Co., Ltd. (Huawei) has been involved in activities determined to be contrary to the national security or foreign policy interests of the United States.” These Huawei affiliates are located in 26 destinations: Belgium, Bolivia, Brazil, Burma, Canada, Chile, China, Egypt, Germany, Hong Kong, Jamaica, Japan, Jordan, Lebanon, Madagascar, Netherlands, Oman, Pakistan, Paraguay, Qatar, Singapore, Sri Lanka, Switzerland, Taiwan, United Kingdom and Vietnam. According to the notice, these affiliates are also being added to the Entity List out of concern that Huawei would use these entities to evade the restrictions placed on it by its addition to the Entity List.
The Entity List identifies persons and companies reasonably believed by BIS to be involved, or pose a significant risk of being or becoming involved, in activities contrary to the national security or foreign policy interests of the United States. For Huawei and its 68 affiliates, BIS has now imposed a license requirement for all items subject to the Export Administration Regulations (EAR) and a license review policy of presumption of denial. Accordingly, any export, re-export from the United States or shipments involving U.S.-origin items or technology to Huawei or one of its listed affiliates will require an export license from BIS; while these license applications will be reviewed by the agency on a case-by-case basis, the review will be conducted under a “presumption of denial,” a high threshold to overcome in the granting of any licenses. BIS has indicated that no license exceptions under the EAR will be available for Huawei-related exports.
While this notice is scheduled to be formally published in the Federal Register on May 21, 2019, it is effective as of May 16, 2019. Shipments, however, that were en route aboard a carrier to a port of export or re-export on May 16 may proceed to that destination under the previous eligibility for a License Exception or where no license was required.