United States: Trump's Comments Highlight Confusion Over Huawei Ban

Last Updated: August 20 2019
Article by Asa W. Markel

The United States currently has three bans in place concerning (or potentially concerning) Huawei products:

  • Congress’ ban on the purchase of Huawei telecommunications equipment by U.S. government agencies, passed in August 2018 (“Government Procurement Ban”);
  • The President’s May 15, 2019 executive order banning the acquisition, sale, importation, or installation of communications technology or services if the technology or services are associated with a “foreign adversary” (“Foreign Adversary Ban”); and
  • The Commerce Department’s May 16, 2019 order bans exports or in-country transfers to Huawei and sixty-eight of its affiliates with respect to any dual-use goods or technology, unless the Commerce Department grants a license for such transaction (“Export Ban”).

The U.S. Government has not promulgated the regulations necessary to clarify the effect of the Foreign Adversary Ban, which does not specifically name Huawei. However, commentators generally expect Huawei to be an entity subject to the Foreign Adversary Ban. The “dual-use” goods under the Export Ban are items with a generally commercial purpose, which also have a national security or military application and are therefore regulated under the Commerce Department’s Commerce Control List. Although, the List also includes non-military items that the U.S. Government may wish to protect for other reasons. Technically, under the Export Ban, Huawei and its sixty-eight affiliates are on the Entity List, a list of persons and businesses the Commerce Department is suspicious of, and for which a U.S. exporter or any other person dealing in goods subject to U.S. export controls, will need to obtain a specific license to transfer dual-use goods or technology.

President Trump’s August 9, 2019 announcement that the U.S. Government would be doing no business with Huawei made headlines this past week. However, the U.S. Government already is not legally able to purchase from Huawei (or ZTE) anyway, under the Government Procurement Ban.  Confusingly, President Trump also indicated that perhaps a trade deal with China could change this legal restriction. However, this is doubtful. First, the Government Procurement Ban is a law, passed by Congress, so it will be difficult for the President to override this ban. Second, the issues that allow the U.S. Government to single out Huawei and its products are quite different from the issues that have allowed the U.S. Government to wage its “trade war” with China. Basically, U.S. Government actions against Huawei are based upon the assessment of U.S. and Allied intelligence agencies that the proliferation of Huawei products constitutes a risk of increased Chinese espionage and acts of cyber warfare. The “trade war,” being a series of import tariffs levied on Chinese origin goods, is ostensibly justified because of Chinese trade practices that the U.S. Government has determined are unfair to U.S. companies. Since the bans on Huawei and its products are not based, legally or philosophically, on the same kinds of harms the “trade war” is designed to combat, it is difficult to see how any trade deal will resolve all (or any) of the Huawei bans.

President Trump’s June 29, 2019 comments about loosening the Export Ban against Huawei do not appear to change the impact of that restriction very much. First, Huawei and sixty- eight of its affiliates are still on the Entity List, and a license is still required to transfer restricted goods and technology to them. Second, as part of Congress’ 2018 legislation banning government purchases from Huawei and ZTE, and overhauling U.S. export controls, Congress specifically disapproved of the removal of export controls that were initiated because of national security concerns, simply because the White House wishes to conclude a trade agreement. This second factor may be part of the reason that there has been no formal change of policy on Huawei. Instead, the White House and Commerce Department have said that they will consider granting licenses for transfers to Huawei for “general merchandise” that is globally available and does not impact any national security concerns. However, for all other proposed transfers to Huawei, the U.S. Government retains its policy of denial for license applications.

Ultimately, in spite of almost weekly comments from the Administration regarding what may be possible in a U.S./China trade deal, both the Government Procurement Ban on Huawei products being bought by the U.S. Government and the Export Ban on sales to Huawei continue in effect. The Foreign Adversary Ban is still expected to include a ban on all Huawei products in the U.S. market, although its implementing regulations are still being finalized. Additionally, for those businesses that have existing relationships with Huawei, the Temporary General License for transactions with Huawei designed to maintain existing systems will expire on August 19, 2019. After that time, few if any transfers of high tech goods or know-how will be permitted to Huawei from any U.S. exporter, or from any business anywhere trading in goods or technology controlled by the U.S. Department of Commerce.

The last point highlights the fact that the Export Ban continues to potentially affect non-U.S. businesses as well as U.S. businesses. Under U.S. export control law, even non-U.S. persons and businesses can be subject to U.S. export controls where they deal in U.S. origin goods, or goods that incorporate U.S. components or technology that are restricted under U.S. law. This all means that even businesses located outside the U.S. will need to continue to monitor the status of the U.S. Government’s Huawei bans and make certain to comply with any requirements that may affect them.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions