Huawei Encouraging US Suppliers to Move Offshore, Report Says
Huawei is urging suppliers to move operations offshore to avoid U.S. sanctions and export controls, which would violate U.S. law, according to a Dec. 3 Reuters report. The Chinese technology giant has been “openly advocating” for companies to escape the jurisdiction of U.S. controls so sales can continue, Commerce Secretary Wilbur Ross told Reuters. “Anybody who does move the product out specifically to avoid the sanction ... that’s a violation of U.S. law,” Ross said. “So here you have Huawei encouraging American suppliers to violate the law.”
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Ross’ comments came about a week after Reuters reported the U.S. was considering new, expansive restrictions on exports to Huawei amid frustration that Commerce’s export controls aren’t working effectively. The restrictions, including Huawei’s placement on Commerce’s Entity List (see 1905160072), have not cut off supplies to the company, Reuters reported.
The Trump administration is considering changes to “two key rules” that would expand U.S. authority to block more foreign sales to Huawei, Reuters reported. The potential changes stem from the administration’s concerns that “key foreign supply chains” remain out of reach of U.S. authorities, the report said. The changes would allow Commerce to regulate sales of “non-sensitive items” made abroad with U.S.-origin technology, including cell phone chips. The changes are being considered even as Commerce granted an extension for a temporary general license to sell to Huawei (see 1911180036).
Commerce and other agencies are considering broadening the de minimis rule, Reuters said, which determines which foreign sales can be blocked by U.S. law depending on how much U.S.-origin content the product contains. Officials are also considering expanding the “Direct Product Rule,” which places U.S. regulations on foreign-made goods that are “based on U.S. technology or software,” Reuters said.