Huawei, SMIC Licensing Stats Don't Represent Accurate Picture, Commerce says
The House Foreign Affairs Committee's release of export licensing information for Huawei and China’s chipmaker SMIC (see 2110210073) may not present an accurate picture of licensing approvals and may mislead industry, the Commerce Department said Oct. 22. Although the agency approved more than a combined $100 billion worth of export licenses for shipments to Huawei and SMIC from November 2020 through April, the statistics didn’t reflect pending applications set to be denied, which would have significantly lowered the percentage of approved applications for both companies.
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Some of those pending applications were in the Bureau of Industry and Security's “intent to deny” process, which is the first step in a license denial. That those denials weren’t included in the statistics released last week “risks politicizing the licensing process, discouraging good faith industry actors from participating in the licensing process, misrepresenting the thoughtful, evidence-based national security determinations made by BIS and other national security agencies,” a Commerce spokesperson said, “and even undercutting U.S. technology leadership.” The agency stressed that the data isn’t “sufficient to draw accurate conclusions about the effectiveness of BIS’s licensing policy or to derive meaningful insight into the exports going to these two companies" and was released "over an arbitrary snapshot in time."
BIS also said the applications were reviewed under a licensing policy announced by the Trump administration that the Biden administration has maintained. The Trump administration last year announced a more lenient license review policy for certain exports to Huawei of telecommunication devices below the 5G level (see 2008170029) and for exports to SMIC of items that produce semiconductors at advanced technology nodes above 10 nanometers (see 2012180039).