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 Mexico tomato dispute – US demands 100% review of all tomatoes within 72 hours of shipment.

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According to publimetro.com.mx, the Secretary of Economy of Mexico, Graciela Marquez claims the US is inflexible in their demand to review 100% of tomato shipments at the border within 72 hours. The Mexican Government claims the US does not have enough man power to process the tomatoes.

The current tomato dispute stems began in 1996, when tomato growers in Florida initiated antidumping investigations against Mexican tomato exports. A deal was reached in November 1996 between Mexican growers and the Department of Commerce that led to the suspending of the investigation. The suspension was renewed in 2002, 2008 and 2013. However, earlier this year, Florida tomato growers complained the Mexican growers were violating their end of the deal. Since May of 2019, Mexican tomato exporters have had to pay a countervailing duty rate of 17.5% before the tomatoes can be exported into the United States.

The final determination will be issued on September 19, 2019 followed by a final determination regarding the damages to the industry due on November 1, 2019.

Mexico is the world’s largest tomato exporter in 2018, with external sales of $2.3 billion dollars of which 99.7% of its exports are to the US.

“Ignorantia juris non excusat” and the need for export compliance in the wake of the Huawei ban.

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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 –

  1. Be sure your exported items do not require an export license.
  2. Determine if the destination country requires an export license.
  3. Know your customers – screen who is buying your goods and be sure a restricted party does not receive your goods.
  4. Red flags – does the destination country of your product meet a need for your product?
  5. 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 dh@gjatradelaw.com or attorney.dave@yahoo.com.