US government staff told to still treat China’s Huawei as blacklisted firm

REUTERS/Hannibal Hanschke/Files

A senior US official told the Commerce Department’s enforcement staff this week that China’s Huawei should still be treated as blacklisted, days after US President Donald Trump sowed confusion with a vow to ease a ban on sales to the firm.

Trump surprised markets on Saturday by promising Chinese President Xi Jinping on the sidelines of the G20 summit in Japan that he would allow US companies to sell products to Huawei Technologies Co Ltd [HWT.UL].

In May, the company was added to the so-called Entity List, which bans American firms from selling to it without special permission, as punishment for actions against U.S. national security interests.

Trump’s announcement on Saturday – an olive branch to Beijing to revive stalled trade talks – was cheered by US chipmakers eager to maintain sales to Huawei, the world’s largest telecoms equipment maker and a key US customer.

But Trump’s comments also spawned confusion among industry players and government officials struggling to understand what Huawei policy he had unveiled.

In an email to enforcement staff on Monday that was seen by Reuters, John Sonderman, Deputy Director of the Office of Export Enforcement, in the Commerce Department’s Bureau of Industry and Security (BIS), sought to clarify how agents should approach license requests by firms seeking approval to sell to Huawei.

All such applications should be considered on merit and flagged with language noting that “This party is on the Entity List. Evaluate the associated license review policy under part 744,” he wrote, citing regulations that include the Entity List and the “presumption of denial” licensing policy that is applied to blacklisted companies.

He added that any further guidance from BIS should also be taken into account when evaluating Huawei-related license applications.

Huawei told Reuters earlier on Wednesday that founder and CEO Ren Zhengfei had said Trump’s statements over the weekend were “good for American companies”.

“Huawei is also willing to continue to buy products from American companies. But we don’t see much impact on what we are currently doing. We will still focus on doing our own job right,” a Huawei spokesman said in an email.

The Commerce Department did not immediately respond to a request for comment.

A person familiar with the matter said the letter was the only guidance that enforcement officials had received after Trump’s surprise announcement on Saturday. A presumption of denial implies strict review and most licenses reviewed under it are not approved.

It is unclear when the Commerce Department will provide its enforcement staff with additional guidance, based on Trump’s promises, and how that might alter the likelihood of obtaining licenses.

The internal memo, not previously reported, came as White House advisers also scrambled to shed light on Trump’s announcement.

White House trade adviser Peter Navarro noted on Tuesday that the government would allow “lower tech” chip sales to the company, which don’t impact national security.

The United States has accused Huawei of stealing American intellectual property and violating Iran sanctions.

It has launched a lobbying effort to convince US allies to keep Huawei out of next-generation 5G telecommunications infrastructure, citing concerns the company could spy on customers. Huawei has denied the allegations.

Reuters 

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.