US official tells staff to still treat Huawei as blacklisted firm

Huawei's booth at a fair in Singapore earlier this week. US President Donald Trump has sowed confusion with a vow to ease a ban on sales to the firm.
Huawei's booth at a fair in Singapore earlier this week. US President Donald Trump has sowed confusion with a vow to ease a ban on sales to the firm.PHOTO: REUTERS

WASHINGTON • A senior US official told the Commerce Department's enforcement staff this week that Huawei should still be treated as blacklisted, days after United States President Donald Trump sowed confusion with a vow to ease a ban on sales to the Chinese technology giant.

Mr Trump surprised markets last Saturday by promising Chinese President Xi Jinping on the sidelines of the Group of 20 Summit in Japan that he would allow US companies to sell products to Huawei.

In May, Huawei was added to the so-called US Entity List, which bans American companies from selling to it without special permission, as punishment for actions against US national security interests.

Mr Trump's announcement - an olive branch to Beijing to revive stalled trade talks - was cheered by US chipmakers eager to maintain sales to Huawei, the world's largest maker of telecommunications equipment and a key US customer.

However, his comments spawned confusion among industry players and government officials struggling to understand what Huawei policy he had unveiled.

In an e-mail to enforcement staff on Monday, Mr John Sonderman, deputy director of the Office of Export Enforcement in the Commerce Department's Bureau of Industry and Security, sought to clarify how agents should approach licence requests by companies seeking approval to sell to Huawei.

All such applications should be considered on merit and flagged with language noting that "this party is on the Entity List. Evaluate the associated licence review policy under part 744", he wrote, citing regulations that include the Entity List and the "presumption of denial" licensing policy that is applied to blacklisted companies.

 
 

He said any further guidance from the Bureau of Industry and Security should also be taken into account when evaluating Huawei-related licence applications.

Huawei told Reuters earlier yesterday that its founder and chief executive Ren Zhengfei had said that Mr Trump's statements at the weekend were "good for Ameri-can companies".

A Huawei spokesman said in an e-mail: "Huawei is also willing to continue to buy products from American companies. But we don't see much impact on what we are currently doing. We will still focus on doing our own job right."

The Commerce Department did not respond to a request for comment.

A person familiar with the matter said the letter was the only guidance that enforcement officials had received. A presumption of denial implies strict review, and most licences reviewed under it are not approved.

It is unclear when the Commerce Department will provide its enforcement staff with additional guidance based on Mr Trump's promises, and how that might alter the likelihood of obtaining licences.

The internal memo came as White House advisers scrambled to shed light on the President's announcement.

White House trade adviser Peter Navarro noted on Tuesday that the US government would allow "lower tech" chip sales to Huawei, which do not impact national security.

The US has accused the company of stealing American intellectual property and violating Iran sanctions. It has launched a lobbying effort to convince US allies to keep Huawei out of next-generation 5G telecommunications infrastructure, citing concerns that the firm could spy on customers. Huawei has denied the allegations.

REUTERS

A version of this article appeared in the print edition of The Straits Times on July 04, 2019, with the headline 'US official tells staff to still treat Huawei as blacklisted firm'. Print Edition | Subscribe