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 firstname.lastname@example.org, email@example.com.
GitHub (owned by Microsoft) is the world’s largest software development platform that provides hosting for software development version control using Git. It was acquired by Microsoft in 2018 for $7.5 billion and has recently started blocking developers in countries facing US trade sanctions.
For example, last week Github restricted the account of Anatoliy Kashkin, a 21-year-old Russian citizen who lives in Crimea. He was told his GitHub account had been restricted “due to US trade controls”.
The correspondence from GitHub advised Kashkin of GitHub’s US trade control policy – listing Crimea, Cuba, Iran, North Korea, and Syria as countries facing US sanctions. In addition to his website now showing a 404 error, Kashkin also can’t access his previous work.
GitHub’s website does advise that “Users are responsible for ensuring that the content they develop and share on GitHub.com complies with the U.S. export control laws, including the EAR (Export Administration Regulations) and the US International Traffic in Arms Regulations (ITAR)” and that “The cloud-hosted service offering available at Github.com has not been designed to host data subject to the ITAR and does not currently offer the ability to restrict repository access by country. If you are looking to collaborate on ITAR- or other export-controlled data, we recommend you consider GitHub Enterprise Server, GitHub’s on-premises offering.”
Besides banning accounts for individuals in Crimea, GitHub has also restricted developers in Iran.
If you want to ensure your company is in compliance with the Export Administration Regulations and the US International Traffic in Arms Regulations (ITAR), contact experienced compliance attorney David Hsu at 832-896-6288 or by email at firstname.lastname@example.org, email@example.com.
According to the New York Times, China’s Number 2 official, Premier Li Keqiang speaking at the World Economic Forum in the Chinese port city of Dalian, promised to cut tariffs, loosen restrictions on foreign investments, protect intellectual property rights and allow foreign companies to apply for China’s generous subsidies for research and development.
Speaking during a question and answer session, Li also said that China would allow foreign financial services companies into its market a year earlier than previously promised, and that it would rewrite many rules on foreign investment.
The NYT mentioned the lack of details, and indicated previous vague promises by Chinese officials in the past.
In addition to extending an olive branch to foreign companies, Premier Li’s remarks also sought to calm worries about the relocation of manufacturing overseas as a result of the Section 232 and 301 duties levied against China.
According to anonymous sources, U.S. Trade Representative Robert Lighthizer will meet with CEO’s from Google, Microsoft, Qualcomm and Oracle today in Silicon Valley.
The topics likely center around intellectual property protections, the ongoing trade war, reports of bias in news searches, emerging technologies such as 5G, AI and robotics.
Other topics could include the Trump Administration’s plan to increase restrictions on exports of new technologies to China due to national security concerns. The new technologies include AI, quantum computing, and speech recognition.
Check back for more news as they become available.
According to Bloomberg – Huawei’s CFO, Wanzhou “Sabrina” Weng was arrested in Canada on December 1st over Huawei’s potential violations of U.S. sanctions on Iran. Sabrina Weng is the deputy chairwoman and daughter of Huawei founder Zhengfei Ren.
The arrest prompted China’s embassy in Canada to demand Sabrina be released and for the US and Canada to “rectify wrongdoings” and to “to clarify the grounds for the detention, to release the detainee and earnestly safeguard the legitimate rights and interests of the person involved”.
It is not known when or if Sabrina will be expedited to the US.
Check back for more updates as they are available. If you have any questions about your company’s compliance with US export controls and or want to ensure your company is in compliance with all the sanctions and laws regarding exporting, contact David Hsu at 832-896-6288 or by email at firstname.lastname@example.org.
The US will end the ban on ZTE buying American software and hardware.
The terms of the deal require:
1. $1 billion penalty;
2. $400 million in escrow to be forfeited in the event of future export violations during the 10-year probationary period;
3. Compliance team in ZTE that will report to the company’s new chairman;
4. ZTE must change board and management team in 30 days.
Various online articles covering the US/ZTE deal ask what the US gets out of the ZTE deal.
None of the news sources mention that this deal saves ZTE and will lead to business for US suppliers of components and software to ZTE:
-Acacia Communications Inc
-Analog Devices Inc
If you or anyone you know has questions about the ZTE deal or export compliance questions, feel free to contact experienced trade attorney, David Hsu at 832-896-6288 or by email at email@example.com.
Reuters reports the Trump administration may seek a penalty up to $1.7 billion from ZTE. In addition to the hefty fine, the U.S. Department of Commerce is also seeking unrestricted access to sites to verify US components are being used as claimed by ZTE.
As previously mentioned on this blog, ZTE is banned from purchasing from US hardware and software suppliers for 7 years due to violating U.S. export controls. This ban would severely limit ZTE’s ability to make phones as US companies provide 25-30% of the components in ZTE equipment, with ZTE paying over $2.3 billion to US suppliers.
As the penalty can change anytime – check back for more updates.
I’ve read almost every ZTE-related article and no article has mentioned what I believe to be the real reason behind President Trump’s efforts to reverse or implement other alternatives to remove ZTE’s 7-year ban on purchasing U.S. hardware and software.
The real reason President Trump is trying to remove the ban is an effort to help US companies. US based companies such as Qualcomm, Intel, Broadcom and Oclaro supply hardware to ZTE. Software companies such as Alphabet supply and provide the Android mobile operating system and updates found on ZTE phones. A 7-year ban means the Google Play Appstore will lose sales on both apps and in-app purchases.
While Trump has faced backlash from Congress, I believe Trump’s efforts are in the interest of helping US companies and improving their stock prices.
According to a Wall Street Journal article dated May 22nd, the US and China have reached a tentative deal on what steps ZTE could take in order for the Trump administration to remove the ban preventing U.S. companies from selling hardware and software to ZTE.
As previously mentioned on this blog, U.S. companies were barred for selling components and software to ZTE for a period of 7 years due to ZTE not complying with the terms of a 2017 plea deal for violations related to shipping US equipment to Iran and North Korea.
Citing sources close to the negotiation, the WSJ reported ZTE would need to make management changes, changes in the board and payment of additional fines.
Check back for more updates to the ongoing ZTE issue as they become available.
For any questions about denial orders, ZTE, customs or trade law, contact David Hsu at 832-896-6288 or by email at firstname.lastname@example.org.