(Reuters) – The Biden administration this week changed licenses for companies to sell to China Huawei Technologies Co. Ltd., further limiting the company to supply items that can be used with 5G devices, sources said.
The changes could disrupt existing contracts with Huawei that have been agreed based on previous licenses that have now been changed, two of the sources said.
The action shows that the Biden government is strengthening a hard line over exports to Huawei, the manufacturer of telecommunications equipment that is placed on the trade list due to US national security.
A U.S. Department of Commerce spokesman declined to comment and said the license information was subject to confidentiality. A Huawei spokesman declined to comment.
The initial export licenses were granted by the trade department after the company was blacklisted by the department in 2019. This week’s new conditions make older licenses more in line with stricter licensing policies applied in the waning days of the Trump administration.
In January, the Trump administration decided to deny 116 licenses with a nominal value of $ 119 billion, and to approve only four worth $ 20 million, according to a document from the Department of Commerce reviewed by Reuters . Most deniers have fallen into three broad categories: memory, handsets and other devices, and network applications.
Between 2019 and 2020, the administration approved licenses for businesses to sell $ 87 billion worth of goods and technology to Huawei, the document reads. Licenses are generally good for 4 years.
While new restrictions on the licenses hurt some suppliers, a source noted, it also leveled the playing field between companies, as some licenses were received under less restrictive policies.
According to one revised license seen by Reuters, which went into effect on March 9, items may not be used “with or in any 5G devices”, a broad interpretation that the article prohibits in a 5G device to go in, even if it has nothing to do with 5G. functioning.
Another modified license was not allowed on March 8 for use in military, 5G, critical infrastructure, enterprise data centers, cloud or space applications.
The notice also states that certain items must have a density of 6 gigabytes or less, and have other technical requirements.
Both revised licenses state that Huawei or customers must implement a parts control plan prior to export and make inventory records available to the U.S. government upon request.
Companies are placed on the trading list, known as the “entity list”, on national security and foreign policies, and licenses to sell to them are usually confronted by a standard of denial.
But Trump took an inconsistent approach to Huawei, which opened the door to more sales when he sought a trade deal, but then declined sharply as tensions began to rise over the coronavirus and Beijing’s repression in Hong Kong last year. .
According to the January document that Reuters saw, there were another 300 applications worth $ 296 billion. It is not clear how much was decided on.
Reporting by Karen Freifeld in New York; Edited by Chris Sanders, Matthew Lewis and Lincoln Feast.