Commerce Department Extends the Temporary General License for Huawei
The U.S. Department of Commerce (Commerce) announced in a Nov. 18, 2019, press release that it will extend the Temporary General License (TGL) for Huawei Technologies Co. Ltd. for an additional 90 days. In a notice effective on that same date, the Bureau of Industry and Security clarified that the TGL will extend until Feb. 16, 2020. The only substantive change is the extension of the expiration of the TGL.
A Federal Register notice to that effect is set to be published on Nov. 20, 2019. Secretary of Commerce Wilbur Ross stated that "the [TGL] extension will allow carriers to continue to service customers in some of the most remote areas of the United States who would otherwise be left in the dark." He continued by saying that "[Commerce] will continue to rigorously monitor sensitive technology exports to ensure that our innovations are not harnessed by those who would threaten our national security."1
According to The New York Times, Reuters and other news sources, the Trump Administration originally planned to extend the TGL for the Chinese technology company for only two weeks. However, after "bureaucratic issues" that likely related to the regulatory burden of a two-week extension, the Administration instead elected a second 90-day extension – the same legal mechanism used in August 2019 to extend the original TGL. It has also been reported that Commerce is considering, after receiving more than 200 requests, whether to grant individual licenses for U.S. firms to sell components to Huawei. No such action has been taken to date.2,3
Since Huawei was placed on Commerce's Entity List, U.S. businesses have been encouraged to apply for specific licenses. The mixed messaging – on one hand, suggesting that licenses would be issued where there is no real national security concern, and on the other, a lack of action on license requests – coupled with the TGL extensions announced in the eleventh hour, understandably create uncertainty and frustration for U.S. businesses.
Huawei and a number of its affiliates were added to the Entity List in May 2019, after Commerce concluded that the company was engaged in activities that are contrary to U.S. national security or foreign policy interests, including alleged violations of the International Emergency Economic Powers Act (IEEPA), conspiracy to violate IEEPA and obstruction of justice. Despite these allegations, Commerce almost simultaneously issued the original TGL, which was already extended once in August; a number of additional Huawei affiliates were also added to the Entity List in August. For more detail on the scope of the TGL, see Holland & Knight's prior alert ("The Drama Around Huawei: Can U.S. Companies Do Business with the Chinese Chipmaker?", July 16, 2019).
Holland & Knight will continue to monitor and report on these changes. For more information or questions regarding the impact of the Huawei 90-day extension, contact the authors.
1 "U.S. Department of Commerce Extends Huawei Temporary General License," Nov. 18, 2019.
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