The Department of Commerce’s bureau of industry and security is amending its direct product rule to restrict access of China-based telecommunications equipment company Huawei to semiconductors that overseas foundries produced using U.S. technologies and software as part of efforts to protect national security.
“Despite the Entity List actions the Department took last year, Huawei and its foreign affiliates have stepped-up efforts to undermine these national security-based restrictions through an indigenization effort. However, that effort is still dependent on U.S. technologies,” Commerce Secretary Wilbur Ross said in a statement published Friday.
“We must amend our rules exploited by Huawei and HiSilicon and prevent U.S. technologies from enabling malign activities contrary to U.S. national security and foreign policy interests,” Ross added.
Under the new rule, Export Administration Regulations will apply to chipsets and related items produced by foreign companies using U.S. technologies and based on design specifications of Huawei and affiliates on the Entity List. Such items shipped within 120 days from the rule’s effective date are not subject to the licensing requirements.
The bureau placed Huawei and 114 of its affiliates on the Entity List in May 2019 due to national security concerns.