White House officials declined to identify Chinese telecom Huawei Wednesday (May 15) as one of the companies whose technology the Department of Commerce can now decide poses a threat to national security per a new executive order, but at about the same time Commerce announced it had put Huawei on a suspect company list that leaves its future in the U.S. very much in doubt.
That list does not ban the sale or transfer of U.S. tech--like chips--to Huawei, but adding Huawei to the Bureau's Entity List (not to be confused with enemies list), means that such sale or transfer requires a license from Commerce, which said it has a "reasonable basis" to conclude that Huawei "is engaged in activities that are contrary to U.S. national security or foreign policy interest."
The license can be denied if a deal "would harm U.S. national security or foreign policy interest," which sounds like Huawei has a high hurdle to overcome.
“This action by the Commerce Department’s Bureau of Industry and Security, with the support of the President of the United States, places Huawei, a Chinese owned company that is the largest telecommunications equipment producer in the world, on the Entity List," said Secretary of Commerce Wilbur Ross. "This will prevent American technology from being used by foreign owned entities in ways that potentially undermine U.S. national security or foreign policy interests," he said.
Helping Commerce toward that move was the Justice Department's indictment of the company for "alleged violations of the International Emergency Economic Powers Act (IEEPA), conspiracy to violate IEEPA by providing prohibited financial services to Iran, and obstruction of justice in connection with the investigation of those alleged violations of U.S. sanctions."
“Huawei is a state-directed instrument of national power used by the Chinese government and Communist Party to destroy their international competitors, undermine U.S. companies, spy on foreign countries, and steal intellectual property and trade secrets,” said Sen. Marco Rubio (R-Fla.), who has been one of Huawei's most vociferous critics in Congress. “I strongly support the President’s executive order and Secretary Ross’s decision to issue a denial of export privileges against Huawei. The administration deserves enormous credit for their efforts to comprehensively tackle the threat that Huawei and other foreign state-directed telecommunications companies pose through their efforts to undermine and endanger critical U.S. systems and infrastructure."
“I have spoken to Secretary of Commerce Ross to offer my full support for the administration’s decision to include Huawei on the Bureau of Industry and Security Entity List," said Sen. Roger Wicker (R-Miss.), chairman of the Senate Commerce Committee. "This is a necessary step to prevent the use of communications equipment that poses a threat to the United States. As chairman of the Senate Commerce Committee, I stand ready to work with the administration and stakeholders to protect our national security and win the race to 5G.”