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Huawei crackdown

US grants licenses, and clarity, to handful of Huawei suppliers

Commerce Department to give 'several' approvals after receiving nearly 300 requests

The U.S. Department of Commerce said it would issue "several" licenses allowing certain suppliers to keep selling to Huawei.   © AP

NEW YORK -- The U.S. will issue "several" licenses to companies that supply Huawei Technologies but will deny others, the Commerce Department said Wednesday, in moves that will likely shape the future of Chinese tech giant's supply chain.

The U.S. government will grant "narrow" licenses to authorize "limited and specific activities which do not pose a significant risk to the national security or foreign policy interests," a department spokesperson said. The spokesperson added that Huawei remains on its so-called Entity List, which essentially bans American companies from supplying products to the world's largest telecom equipment maker unless they are granted approval.

While recipients of these licenses were not disclosed, the department's announcement signals Huawei will soon get some certainty -- albeit not necessarily relief -- on the status of its ties with partners ranging from semiconductor manufacturers to Google, which supplies the Android operating system for its smartphones.

The Commerce Department's announcement comes amid U.S. and China's silence on a so-called phase 1 trade deal, which was previously floated by President Donald Trump for signing by mid-November. This month, Trump disputed Chinese and American officials' statements about a rollback of tariffs on China, calling into question how much progress has been made in trade talks.

Trump has said on several occasions earlier this year that Huawei could be part of trade talks between the two countries.

The U.S. has received more than 290 requests for case-by-case licenses to do business with Huawei, Secretary of Commerce Wilbur Ross told local media Tuesday. 

"We have now been starting to send out the 20-day intent to deny letters and some approvals," Ross said.

So far the Commerce Department's decision-making process regarding these applications remains largely a black box to businesses awaiting results on their license requests.

"While the Commerce Department ... has said that any Huawei export or reexport licenses will be limited to specific activities that do not pose a significant risk to U.S. national security or foreign policy interests, no specific standard has been set as as to the types of products that will be licensed," said Douglas Jacobson, a partner at Washington-based law firm Jacobson Burton Kelley. “Because the Entity List licensing policy is presumption of denial, each license application is reviewed on a case-by-case basis."

Companies that have received intent to deny letters still have an opportunity to appeal, while for some others decisions are still pending, said Kevin Wolf, a former U.S. assistant secretary of commerce and partner at law firm Akin Gump.

Wednesday's announcement also comes on the heels of another 90-day reprieve for Huawei from the Commerce Department, which on Monday renewed the temporary general license that allows all companies to continue their existing business with the company.

Huawei and dozens of its affiliates were added to the Entity List in May by the Bureau of Industry and Security, an agency under the Commerce Department responsible for export control. The Chinese company had stockpiled a year's worth of supplies ahead of the ban.

Additional reporting by Taisei Hoyama in Washington.

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