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 firstname.lastname@example.org, email@example.com.
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.
I have previously mentioned Huawei’s Hongmeng OS, their in-house Android alternative that was slated to have an earlier release date after the US placed Huawei on the “entity list”. However, Huawei’s Hongmeng OS’ first device won’t be on a smart phone – but rather on Huawei’s TV with a smart screen. The smart screens on TV’s will be the communication hub for the tv and the living room and is expected to launch next month.
The Hongmeng is also trademarked as “Ark” and has been reported to be in development for a long time. I thought the Hongmeng OS would be shelved for awhile after the reprieve by President Trump, however, it seems Huawei has the new OS ready to go. Will be interested to see how the OS operates and what kind of native application support it will have.
As reported by the Wall Street Journal, Treasury Secretary Steven Mnuchin asked U.S. suppliers of Huawei to apply for export licenses in order to resume sales to the Huawei. The export licenses are required as Huawei is listed on the BIS entity list.
At last month’s G20 meeting, Trump announced the ability for US companies to sell to Huawei if there was no threat to “U.S. national security”.
I just checked the BIS website and there are no published guidelines regarding products that would be eligible for a license and what components may be a threat to national security.
While both the US and China agreed to new meetings, there have also been no set dates for new face-to-face meetings.
If you need assistance applying for an export license to sell to Huawei or any other entity on the BIS list, or have questions how the Huawei ban will impact your business, contact experienced export attorney David Hsu at 832-896-6288 or by email at firstname.lastname@example.org, email@example.com.
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 firstname.lastname@example.org, email@example.com.
CNBC published an article online citing a study conducted by Christopher Balding, an associate professor at Fulbright University Vietnam, and London-based conservative think tank Henry Jackson Society. The study looked at resumes and curriculum vitae of Huawei employees and they report that “key mid-level technical personnel employed by Huawei have strong backgrounds in work closely associated with intelligence gathering and military activities.” The paper said that some employees had “to specific instances of hacking or industrial espionage conducted against Western firms”.
The resumes and personal information was leaked when a website and database run from a recruitment firm was compromised and published online.
In response, Huawei has claimed they are unable to verify the Huawei employee information and cannot confirm whether the “veracity of all of the information published online”. In response, Huawei also states that “Huawei maintains strict policies for hiring candidates with military or government backgrounds. During the hiring process, these candidates are required to provide documentation proving they have ended their relationships with the military or the government”.
A Huawei spokesperson also added: “We welcome professional and fact-based reporting on investigations into Huawei’s transparency. We hope that any further research papers will contain less conjecture when drawing their conclusions, and avoid so many speculative statements about what Professor Balding ‘believes,’ ‘infers,’ and ‘cannot rule out,’”.
If you have questions about how the Huawei inclusion on the BIS entity list means for your business, contact export license attorney David Hsu at 832-896-6288 or by email at firstname.lastname@example.org, email@example.com.
Huawei’s surprise placement on the BIS Entity List highlights the crucial need for your company to have a compliance program in place.
Many people believe export compliance programs only apply to the big guys – however, even the smallest business that sends their products to customers outside of the country are subject to the various export regulations and the steep penalties for export violations. as the saying goes, Ignorantia juris non excusat or ignorantia legis neminem excusat (Latin for “ignorance of the law excuses not” and “ignorance of law excuses no one” respectively).
Small and medium sized company personnel may not know of these requirements until it is too late – fines for export violations can reach up to $1 million per violation in criminal cases and administrative cases can result in penalties amount to the greater of $250,000 or twice the value of the transaction. Criminal violators may even face up to 20 years in jail time and punishment for administrative cases can include denial of export privileges – it’s a risk you can’t afford to take.
Here are a few quick tips to protect your company –
- Be sure your exported items do not require an export license.
- Determine if the destination country requires an export license.
- Know your customers – screen who is buying your goods and be sure a restricted party does not receive your goods.
- Red flags – does the destination country of your product meet a need for your product?
- Be sure you have a copy of all the required documentation – it is not enough to hire a freight forwarder to handle the export.
For more information and a no obligation consultation on creating an export compliance program – contact experienced compliance attorney David Hsu at 832-896-6288 or by email at firstname.lastname@example.org or email@example.com.
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.