Export Controls and Economic Sanctions Update
Summary: The final rule creates a temporary general license that allows, from May 20, 2019, through August 19, 2019, limited activities with Huawei and affiliated entities as described below and in the final rule.
On May 16, 2019, the Commerce Department’s Bureau of Industry and Security (“BIS”) added Huawei Technologies Co., Ltd. (“Huawei”) and sixty-eight non-U.S. affiliates to the Entity List creating a licensing requirements for the export, reexport or transfer of all items subject to the Export Administration Regulations (“EAR”) to the affected entities.
Today, BIS posted a final rule that creates a temporary general license that allows, from May 20, 2019, through August 19, 2019, the following:
- Continued Operation of Existing Networks and Equipment: BIS authorizes engagement in transactions, subject to other provisions of the EAR, necessary to maintain and support existing and currently fully operational networks and equipment, including software updates and patches, subject to legally binding contracts and agreements executed between Huawei and third parties or the sixty-eight non-U.S. Huawei affiliates and third parties on or before May 16, 2019.
- Support to Existing Handsets: BIS authorizes engagement in transactions, subject to other provisions of the EAR, necessary to provide service and support, including software updates or patches, to existing Huawei handsets that were available to the public on or before May 16, 2019.
- Cybersecurity Research and Vulnerability Disclosure: BIS authorizes, subject to other provisions of the EAR, the disclosure to Huawei and/or the sixty-eight non-U.S. affiliates of information regarding security vulnerabilities in items owned, possessed, or controlled by Huawei or any of the sixty-eight non-U.S. affiliates when related to the process of providing ongoing security research critical to maintaining the integrity and reliability of existing and currently fully operational networks and equipment, as well as handsets.
- Engagement as Necessary for Development of 5G Standards by a Duly Recognized Standards Body: BIS authorizes, subject to other provisions of the EAR, engagement with Huawei and/or the sixty-eight non-U.S. affiliates as necessary for the development of 5G standards as part of a duly recognized international standards body (e.g., IEEE – Institute of Electrical and Electronics Engineers; IETF – Internet Engineering Task Force; ISO – International Organization for Standards; ITU – International Telecommunications Union; ETSI- European Telecommunications Standards Institute; 3GPP – 3rd Generation Partnership Project; TIA- Telecommunications Industry Association; and GSMA, a.k.a., GSM Association, Global System for Mobile Communications).
These are the only authorized activities under the new temporary general license.
Exporters, re-exporters, and/or transferors utilizing this Temporary General License are also required to make a certification statement specifying how the export, reexport, or transfer (in-country) meets the scope of the Temporary General License, and must retain the certification statement in accordance with the record retention requirements in Part 762 of the EAR.
This final rule does not amend the Entity List, and restrictions that are outside of the scope of this Temporary General License still require an export license from BIS, as further described in the May 16th order.
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