United States: Additional Huawei Affiliates Added to Entity List; BIS Updates Temporary General License And Issues FAQs; DoD Prohibits Federal Agencies From Obtaining Huawei Equipment

Over the past few weeks, the U.S. government has taken additional actions targeting Huawei Technologies Co., Ltd. (Huawei) and its affiliates.

The May 16, 2019 addition of Huawei and many of its non-U.S. affiliates to the Entity List and related actions was discussed in our May 24, 2019 alert.

The more recent actions impact federal government procurement, add more non-U.S. affiliates of Huawei to the Entity List, revise and extend the Temporary General License (TGL) issued on May 20, 2019, and provide additional clarification on the licensing policy of the Bureau of Industry and Security of the U.S. Department of Commerce (BIS) as it relates to exports to Huawei and its designated affiliates.

New Restrictions on Federal Government Procurement

On August 13, 2019, an interim rule was issued amending the Federal Acquisition Regulation (FAR) to prohibit federal agencies from procuring or obtaining, or extending or renewing a contract to procure or obtain, any equipment, system or service that uses telecommunications or video surveillance equipment or services produced by certain Chinese companies (including Huawei, any Huawei subsidiary or any Huawei affiliate) as a substantial or essential component of any such system, or as a critical technology that is part of any such system, unless an exception applies or a waiver has been granted.1 This long-awaited interim rule implements provisions of the National Defense Authorization Act (NDAA) for Fiscal Year 2019, thus formalizing limitations that federal contractors have expected in the area of supply chain management and information security. The interim rule creates two new FAR clauses – FAR 52.204-24, Representation Regarding Certain Telecommunications and Video Surveillance Services or Equipment, and FAR 52.204-25, Prohibition on Contracting for Certain Telecommunications and Video Surveillance Services or Equipment – which require certifications from contractors and impose prohibitions reflecting the requirements outlined above. Interested parties may submit written comments to the General Services Administration's Regulatory Secretariat Division on or before October 15, 2019, to be considered in the formulation of the final rule.

Designation of Additional Huawei Affiliates

On August 19, 2019, BIS announced a final rule (subsequently published in the Federal Register on August 21, 2019) adding another 46 non-U.S. affiliates of Huawei to the Entity List, thereby prohibiting the export, reexport and transfer to such entities of commodities, software and technology subject to the Export Administration Regulations (EAR), absent a license from BIS or application of the revised TGL. Affiliates located in China have been added under the existing entry for Huawei, while others have been designated via separate entities. The Entity List now contains entries for Huawei affiliates in a total of 46 countries other than China, including Canada, the United Kingdom and numerous other countries in Europe, Asia, Central and South America, and the Middle East.

Amendment and Extension of the TGL

By a separate final rule (also announced on August 19, 2019 and published on August 21, 2019), BIS revised and extended the TGL discussed in our May 24, 2019 alert.

This final rule updated the TGL, located in Supplement No. 7 to Part 744 of the EAR, by extending its validity through November 18, 2019, clarifying transactions that are authorized under the TGL and modifying the certification statement requirements for reliance on the TGL.

The updated TGL clarifies the scope of authorized transactions as follows:

  • Continued Operation of Existing Networks and Equipment. The authorization for continued operation of existing networks and equipment extends only to activities such as patching networks and network infrastructure equipment. It does not authorize the transfer of equipment for general business purposes or for activities that are not in direct support of an existing and "fully operational network" (i.e., a third-party network providing services to its customers). The authorization covers both emergency and planned software updates including bug fixes, security vulnerability patches, and other changes to existing versions of the software, subject to the requirement that the software changes are necessary to support and maintain existing and currently fully operational networks and equipment. Replacement of defective hardware is also permitted under the TGL. However, the TGL further specifies that authorized transactions "may not enhance the functional capabilities of the original software or equipment."
  • Support to Existing 'Personal Consumer Electronic Devices' and 'Customer Premises Equipment.' The revised TGL replaces the term "handsets" with the defined term "personal consumer electronic devices," which includes phones and other personally owned equipment such as tablets, smart watches and mobile hotspots. The TGL more broadly authorizes service and support for customer premises equipment such as network switches and home networking adapters that enable consumers to access network communication services and distribute them within their home or small business. Such service and support may not enhance the "functional capacities"2 of the equipment or any software being supported. The authorization is further limited to service and support for Huawei personal consumer electronic devices and customer premises equipment that were publicly available on or before May 16, 2019.

  • Removal of Authorization for the Engagement as Necessary for the Development of 5G Standards. The amended TGL removes the authorization for the "engagement as necessary for development of 5G standards by a duly recognized standards body." Instead, BIS determined that existing provisions of the EAR exempting publicly available information "suffice for purposes of addressing the application of the Entity List-based license requirements to activities in connection with standards development bodies, including 5G standards bodies."

The updated TGL also substantially amends relevant certification statement requirements. Under the updated TGL, the exporter, reexporter or transferor must obtain a certification statement and any additional support documents needed to substantiate the certification statement from the listed Huawei entity prior to exporting, reexporting or transferring any item under the TGL. The certification statement must list all Huawei entities that are receiving items under the TGL (including physical addresses, telephone number, email addresses, website and name/title of the individual signing the certification). The certification must include a complete list of items and the associated Export Control Classification Numbers (ECCNs) or EAR99 designation, if applicable, for the items that are subject to the transaction. The certification must also identify the paragraph in the TGL that authorizes the transaction; a general statement that the items fall within the scope of the TGL is insufficient.

BIS also added a recordkeeping requirement to specify that both the Huawei entity and the exporter, reexporter or transferor are responsible for retaining the certification and any supporting documentation. Where relevant, the supporting documentation must show that there was a legally binding contract in place between the Huawei entity and a third party on or before May 16, 2019. Finally, the certification must include a statement that the person signing the certification has the requisite authority to legally bind the Huawei entity receiving the item. One certification may be used for multiple transactions, provided that the items and consignee/end user are the same, and further provided that the exporter, reexporter or transferor maintains a log or similar record that identifies each item and the quantity therefor for each transaction made against the certification statement. These certifications and related records are subject to the standard five-year record-keeping requirement and must be stored in a format compliant with the EAR.

Of note, the amended TGL confirms that imports from Huawei and services provided to Huawei are not prohibited by Huawei's designation on the Entity List. The services provided, however, cannot involve the export, reexport or transfer (in-country) of items subject to the EAR.

Clarification of Licensing Policy

On August 19, 2019, in conjunction with its announcement of the amendment of the TGL, BIS also issued a General Advisory Opinion relating to 5G standards development activities when a listed Huawei entity is involved. BIS published a general advisory opinion regarding activities that are prohibited in the standards-setting context when a listed entity is involved. Whether prior authorization is required depends on whether the activity involves the disclosure of software or technology that is subject to the EAR and not subject to an exemption (e.g., made available to the public without restriction upon its dissemination). If the software or technology does not fall within an exempted category, the BIS advisory opinion states that the prohibition on releasing EAR-controlled software or technology to Huawei or its listed affiliates without a license would apply.

In September, BIS issued and updated FAQs related to the TGL and the Entity List designations. The TGL FAQs summarize and provide guidance on the application of the revised TGL. The second set of FAQs addresses the impact of the designations more generally and also provides information regarding the TGL. Among other things, the FAQs clarify that imports from Huawei and financial transactions with Huawei are not prohibited. Furthermore, the FAQs clarify that while services are generally not subject to the EAR, where the performance of any activity, such as the management of a telecommunications network, includes export, reexport or transfer (in-country) of a U.S.-origin item, then the transaction would be subject to the EAR and require a license unless the TGL applies. Guidance is also provided regarding the impact of the designations on patent licensing. Regarding the TGL, BIS notes that any decision to renew will be made "at the sole discretion of the U.S. Government," and that if the TGL is not renewed, license requirements will immediately apply to all exports, reexports and transfers (in-country) to Huawei and its designated affiliates.


1 "Covered telecommunications equipment or services," as defined in the NDAA, includes:

  • Telecommunications equipment produced by Huawei Technologies Company or ZTE Corporation (or any subsidiary or affiliate of such entities);
  • For the purpose of public safety, security of Government facilities, physical security surveillance of critical infrastructure, and other national security purposes, video surveillance and telecommunications equipment produced by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company (or any subsidiary or affiliate of such entities);
  • Telecommunications or video surveillance services provided by such entities or using such equipment; or
  • Telecommunications or video surveillance equipment or services produced or provided by an entity that the Secretary of Defense, in consultation with the Director of National Intelligence or the Director of the Federal Bureau of Investigation, reasonably believes to be an entity owned or controlled by, or otherwise connected to, the government of a covered foreign country.

2 The term "functional capacities" is not defined in the relevant final rule.

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.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
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.


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.


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