US suppliers to Huawei get another 90 days before embargo

US suppliers to Huawei get another 90 days before the blockade comes down

19 August 2019 | Alan Burkitt-Gray

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The US has given another 90 days’ partial relaxation of its embargo on Huawei’s dealings with US companies, deferring a ban that was due to come into force today.

The move partly eases the conditions imposed in May when the Department of Commerce (DoC) added the Chinese company to its entity list.

“As we continue to urge consumers to transition away from Huawei’s products, we recognise that more time is necessary to prevent any disruption,” said Secretary of Commerce Wilbur Ross (pictured). Today plus 90 days is 17 November.

At the same time, the DoC has for the first time explicitly allowed international organisations such as the GSMA and the Internet Engineering Task Force. When the DoC added Huawei to its entity list, meaning US citizens and companies are banned from dealing with it, the department forgot to specify how international bodies should be treated. The GSMA, whose registered office is in Atlanta, told Capacity at the time that it was studying the implications.

Now the DoC “authorises … engagement with Huawei … as necessary for the development of 5G standards”.

The 90-day relaxation is via a temporary general licence, that permits US suppliers of software and hardware to trade with Huawei, for “specific, limited engagements in transactions involving the export, re-export, and transfer of items”.

This new temporary general licence comes into force today and lasts for 90 days. But Capacity’s sources in the industry made it clear that this applies only to existing technology and existing network builds.

It allows existing networks to be maintained, but will not permit new contracts where they need US-origin hardware or software – almost inevitably part of all telecoms projects. In particular, it won’t let Huawei contract to build 5G networks unless it can find a way round the US suppliers it needs.

“It’s not to help Huawei but to help US companies,” a source told Capacity. Huawei appears to be working to find non-US suppliers for the hardware and software that is needed for phones and network equipment.

Most urgently, that includes Google’s Android operating system that Huawei uses in its phones. Huawei is hoping that Google will get a DoC licence for it to build Android into new phones.

But Huawei earlier this month introduced its home-grown HarmonyOS. At the moment it not available for phones, but Capacity understands that Richard Yu, the company’s consumer CEO, has said: “If we needed to, we could do it in days.” However, Huawei would need to follow that with an ecosystem of apps. “We’d prefer Android,” said a Huawei person.