The U.S. Commerce Department’s Bureau of Industry and Security has established a 90-day Temporary General License, effective to Aug. 19, that will allow U.S. exporters who meet certain regulatory conditions to continue conducting business with Huawei Technologies Co. Ltd. of China and its 68 overseas affiliates.
The Chinese telecommunications technology manufacturer and its affiliates were placed on the BIS Entity List on Thursday, subjecting them to stricter U.S. export licensing controls. U.S. semiconductor and circuit manufacturers are major suppliers to Huawei.
U.S. exporters eligible to qualify for usage of the Temporary General License (TGL) must meet all three of the “conditions” and ensure that one of the four “authorized transactions” is applicable before fulfilling the last requirement, which is creating a “certification statement” demonstrating that the transaction meets the scope of the TGL. This certification statement must be kept for record-keeping purposes by the exporter, re-exporter or transferor.
“Authorized transactions” include the continued operation of existing networks and equipment, support to handsets acquired before Thursday, cybersecurity research and vulnerability disclosure and “engagement as necessary for development of 5G standards by a duly recognized standards body.”
“Usage of this Temporary General License is an open door for BIS Export Enforcement to visit your operation to ensure that you have complied with the conditions, are eligible under one of the authorizations and that you have made the appropriate certifications prior to the release of the transaction,” warned Paul DiVecchio, owner of DiVecchio & Associates, a Boston-based export compliance consultancy. “When this occurs, you better be prepared to demonstrate that you’re in compliance.”
DiVecchio, whose commentary “Why this export compliance consultant is ‘mad as hell’” was featured in American Shipper Monday, also urged U.S. companies to work closely with their freight forwarders and express carriers involving shipments that qualify for the TGL.
Since the forwarders and express carriers will conduct restricted party screening, they will get a hit and will not move the freight unless the exporter can provide written assurance that the transaction qualifies for the TGL.
“Anticipate mass confusion,” DiVecchio said.