Department of Commerce amends direct product rule to restrict Huawei’s use of US technology and software.

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Yesterday, May 15, 2020, the Department of Commerce’s Bureau of Industry and Security (BIS) announced plans to restrict Huawei’s use of U.S. technology and software to design and manufacture its semiconductors abroad by amending the foreign-produced direct product rule. This change to the rule was established to counter Huawei’s acquisition of semiconductors that are the direct product of certain software and technology from the US.

While BIS added Huawei and its affiliates to the Entity List in 2019 and therefore requiring US companies wishing to export items to Huawei required the companies to obtain a license. Despite being placed on the Entity List, Huawei continued to use software and technology from the US to design semiconductors, there by getting around the basis for placement on the Entity List. Specifically, Huawei would use semiconductor fabrication facilities overseas that incorporated U.S. equipment.

The rule changes specifically mention Huawei and are written to close the loophole. The full announcement and full text of the rule changes can be found at the Department of Commerce website here.

If you have questions how the changes may impact your company, contact export compliance attorney David Hsu by phone/text at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

Huawei’s Google maps alternative.

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As you are aware, Huawei’s inclusion on the US entity list means no access Android and the Google Play Store. As a result Huawei has been looking at alternative companies to replace the Google Maps application – and last week, found their replacement.

According to Reuters, Huawei reached a deal with Dutch mapping company, TomTom which will see TomTom providing Huawei access to their navigation, mapping and traffic information.

With the TomTom information, Huawei will create their own proprietary apps for their own Harmony Operating System.

If you have any questions how Huawei’s inclusion on the BIS entity list will impact your business or if you are in need of export compliance, contact experienced trade attorney David Hsu by phone/text at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

Huawei received approximately $75 billion in support from…

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According to a Wall Street Journal article published on Christmas day, Huawei reportedly had “access to as much as $75 billion in state support”. The $75 million figure was a result of the WSJ accounting of public records of Huawei and includes $46 billion in loans and $25 billion in tax cuts.
This recent article from the WSJ may bolster the US government’s case for barring mobile hardware made by Huawei to be used by government agencies. The US government may also cite this argument in it’s appeal to other countries to avoid using Huawei telecommunications equipment when municipalities choose a 5G equipment provider.
Huawei has denied any ties to the Chinese government and Huawei is still subject to a ban on using US origin hardware and software.
If you have any questions on how the Huawei band will impact your business, or if you have concerns about your export compliance with the current ban on Huawei – contact experienced trade and compliance attorney David Hsu by phone/text at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

Newest Huawei P30 smartphone ships with Google Android 10.

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Despite a current ban on US companies from supplying technology to Huawei, the new P30 Pro features a 6.47 inch display, 4 cameras and Google’s  Android 10 (Android 9 “Pie”was the last Android version to be released with a name associated with a confectionary food).
While Google was exempt from export restrictions imposed against Huawei and the supplying of software for new products. Future Huawei smartphones such as the 5G Mate 30 Pro may include the Huawei developed Harmony OS.
If your company does business with Huawei and you want to be sure you are in compliance, contact experienced trade attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

China General Nuclear Power Group added to BIS entity list.

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This past Wednesday, the U.S. Department of Commerce added China General Nuclear Power Group (CGN) to the BIS entity list. As a result, American companies are now prevented from selling any products to China’s largest state-owned nuclear company. If any American company or person does business with CGN (or any other listed entity), they would be violating the law and subject to persecution.

The U.S. Department of Commerce claims CGN its subsidiaries engaged in activity to acquire advanced U.S. nuclear technology and material for use in the Chinese military.

China claims the real goal of placing CGN on the entity list is to limit China’s growth under China’s “Made in China 2025” initiative. Made in China 2025 is an effort by the Chinese government to increase the high tech capability and manufacturing of China. If successful, the “Made in China 2025” efforts will make China the a superpower in high technology in Asia.

If you have any questions about your company’s operations and want to ensure compliance with the new entity list addition, contact experienced export compliance attorney David Hsu at 832-896-6288 or by email at dh@gjatradelaw.com, attorney.dave@yahoo.com.

US Companies can no longer do business with Huawei on August 19th.

In May, the Trump administration placed Huawei on the BIS entity list – a list of foreign organizations with whom U.S. companies are restricted from doing business with due to national security concerns. The Trump administration believes the Chinese government has influence over Huawei and that certain Huawei equipment and technology may allow the Chinese government to spy using the Huawei equipment – especially the planned 5G equipment Huawei has developed.

Even though Huawei is on the BIS entity list, the Trump administration issued a 90-day exemption to the ban, allowing U.S. companies to sell certain products and services to Huawei. However, this 90-day exemption will end on Monday, August 19th.

It is unknown whether the U.S. government will issued another extension. Given the current situation in Hong Kong and the lack of progress on US/China trade talks, the Trump administration will likely not grant another extension.

Will post any additional Huawei news as it becomes available. If you have any questions or concerns about whether your business can continue business with Huawei, contact experienced export compliance attorney David Hsu at 832-896-6288 or by email at dh@gjatradelaw.com, attorney.dave@yahoo.com.

Intel has begun selling to Huawei as US loosens restrictions.

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Since the US eased restrictions on supplying components to Huawei, the largest US chimpaker, Intel, said they have begun selling products to Huawei “within the rules of the law”. Additionally, Intel says they are also requesting an export license to sell “general purpose computing” chips to Huawei that do not pose a national security risk.

As you are aware, the Trump administration raised concerns regarding the use of Huawei technology may contain backdoors that would allow the Chinese government to spy on users, posing a national security risk. As a result, the US Department of Commerce added Huawei to their entity list this past May. Inclusion on the entity list precluded Huawei from buying parts and components from American companies without US government approval (an export license).

However, after the Trump met with Chinese President Xi Jinping at the G20 summit last month, President Trump said that US firms can resume selling equipment to Huawei.

Additionally, earlier in July, Commerce Secretary Wilbur Ross announced an easing of restrictions against the Chinese company in line with Trump’s statements after the G20 summit, stating that the US would issue licenses to US companies looking to sell to Huawei as long as the sales do not pose a threat to national security. An export license would still be required as Huawei has not been removed from the entity list.

If you have any questions whether your company can continue to do business with Huawei, contact experienced export compliance attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

US announces clarification of Huawei ban.

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Wilbur Ross, Official Portrait

At the G-20 summit, President Trump announced that US companies could sell to Huawei. Today, the Trump administration filled in the rest of the details by announcing a relaxation of the restrictions against selling to Huawei – limited the ban only to products that are related to national security.

Yesterday, Commerce Secretary Wilbur Ross announced that that licenses would be issued to companies to sell their products to Huawei under certain conditions.

On Tuesday Wilbur Ross, the commerce secretary, said that Washington would issue licences to companies to sell their products to the Chinese telecoms equipment maker under certain conditions. The main condition being “no threat to US national security”. As Huawei is still on the BIS entity list, companies that sell products not harmful to US national security will still need to apply for a license.

If you have questions about the Huawei ban or would like to apply for an export license, contact export compliance attorney David Hsu at 832-896-6288 or by email at dh@gjatradelaw.com, attorney.dave@yahoo.com.

Huawei’s OS is 60% faster than Android.

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Despite a recent reprieve prohibiting doing business with Huawei, Huawei is still going forward with their Hong Meng OS, an alternative to Android.

Based off testing on Chinese handset brands Oppo and Vivo, it is believed that Hong Meng OS is 60% faster than Android. In addition, Huawei is also preparing an app store alternative to Google’s Play and Apple’s App store.

In the same interview, Huawei’s CEO also countered speculation that Huawei handsets could be used for surveillance by talking up Huawei’s protection of user data, claiming it would never hand over data to the Chinese government because it would be too risky for its reputation internationally, stating:

“We will never do such a thing. If I had done it even once, the US would have evidence to spread around the world. Then the 170 countries and regions in which we currently operate would stop buying our products, and our company would collapse,” he told the Financial Times.

“After that, who would pay the debts we owe? Our employees are all very competent, so they would resign and start their own companies, leaving me alone to pay off our debts. I would rather die.”

If you have any questions how the Huawei ban may impact your business or want to be sure your export compliance program meets the ever-changing needs, contact experienced trade attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

“Teardown” of Huawei P30 Pro highlights US parts content of Huawei phones.

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According to the folks at Android Authority, citing a Nikkei conducted teardown of Huawei’s new flagship device, revealed that only 0.9 percent of the components in a P30 Pro come from the US – in other words, only 15 US parts out of a total of 1,631 parts.

Dollar wise, the total US components cost $59.36 out of the $363.83 total component price. The parts from the US include the DRAM from Micron, parts from Skyworks, Qorvo and the Gorilla Glass from Corning.