On June 15, 2020, the US Department of Commerce’s Bureau of Industry and Security (“BIS”) published an interim final rule (“Interim Final Rule”) effective on June 18, 2020 to authorize the limited release of certain items subject to the Export Administration Regulations (“EAR”) to Huawei and its affiliates listed on the BIS Entity List (“Huawei Listed Entities”) in the context of international efforts to develop technical standards for 5G and other new technologies. In a statement, the Commerce Department explained the change will “ensure Huawei’s placement on the Entity List in May 2019 does not prevent American companies from contributing to important standards-developing activities despite Huawei’s pervasive participation in standards-development organizations.” BIS is seeking comments on the Interim Final Rule, which must be submitted on or before August 17, 2020.
Since Huawei and 114 of its affiliates were added to the BIS Entity List last year, US companies have requested clarity about participation in international standards organizations that also involve Huawei Listed Entities. The Interim Final Rule authorizes the release of certain technologies to Huawei Listed Entities without a license if such release is made in the context of “voluntary consensus standards bodies” and for the purpose of contributing to the revision or development of a “standard,” as defined in the Interim Final Rule. The Interim Final Rule applies only to technology designated as EAR99 or controlled on the Commerce Control List (“CCL”) for anti-terrorism (“AT”) reasons only; technology that is controlled for other reasons is not covered by the Interim Final Rule.
The Interim Final Rule aims to ensure that the US industry can fully engage and advocate for US technologies to become international standards in the telecommunications sector. It does not change or alter the restrictions that otherwise apply to the Huawei Listed Entities. The export/reexport/transfer of all other items subject to the EAR to Huawei Listed Entities, including the technologies within the scope of the Interim Final Rule when released for other purposes, remain prohibited unless authorized by a BIS license. For additional information on these restrictions, please see our prior blog posts on the initial designation of Huawei and sixty-eight of its non-US affiliates to the Entity List on May 16, 2019 here; on the issuance of the original TGL on May 20, 2019 here; on the designation of forty-six additional non-US affiliates of Huawei to the Entity List and on the TGL updates issued on August 19, 2019 here; on BIS’s publication of Huawei-related FAQs on September 9, 2019 here; on BIS’s previous extensions of the TGL here, here, and here; on BIS’s request for comments on future extensions here and here; and on BIS’s changes to the EAR’s foreign-produced direct product rule to target Huawei’s acquisition of certain semiconductors here.
