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US Commerce Department adds Huawei and 70 affiliates to trade blacklist

The US Commerce Department is adding Chinese telecom company Huawei and 70 affiliates to its ‘Entity List’, which would prevent the company from buying components from US companies without US government approval, Reuters reports. Commerce Secretary Wilbur Ross Ross announced the decision and said the department had reasonable basis to believe Huawei was “engaged in activities that are contrary to US national security.” The decision would also make it “difficult if not impossible” for Huawei to to sell products for which it relied on parts from US suppliers.

What is the ‘Entity List’?

The US Commerce Department website says its Entity List is part of its Export Administration Regulations (EAR) and comprises “certain foreign persons – including businesses, research institutions, government and private organisations, individuals, and other types of legal persons – that are subject to specific license requirements for the export, re-export and/or transfer (in-country) of specified items”. The list specifies the license requirements that it imposes on each listed person or organisation. It says that these parties “present a greater risk of diversion to weapons of mass destruction programs, terrorism, or other activities contrary to US national security and/or foreign policy interests”. The department’s Bureau of Industry and Security can add a foreign party to the Entity List for engaging in activities contrary to US national security and/or foreign policy interests. The website reads, “In most instances, license exceptions are unavailable for the export, reexport, or transfer (in-country) to a party on the Entity List of items subject to the EAR. Rather, prior license authorisation is required, usually subject to a policy of denial.”

The Trump administration has for months been lobbying other countries not to use Huawei equipment in next-generation 5G networks, and the latest move comes days after the administration imposed new tariffs on Chinese goods amid an escalating trade war. The latest round of tariffs included cell phones, laptops and tablets, which could face tariffs of up to 25%, per Reuters. Last week, the US Federal Communications Commission banned China Mobile Ltd from the US over national security concerns and said it would open a review of other Chinese companies as well, per Mint.

India ‘looking to limit Huawei’s involvement’ in 5G infrastructure

Last December, India decided to to let Huawei go ahead with 5G trials, per Business Insider. After reports emerged that the company was being banned in several countries for security concerns, telecom secretary Aruna Sundararajan clarified that the Indian government had only allowed Huawei to carry out trials for 5G connectivity. In March, Nikkei Asian Review reported, citing government sources, that the Indian government was looking for a way to restrict Huawei’s involvement in the country’s 5G infrastructure without appearing to single it out. One option was a “middle approach” in which Huawei would only be kept out of vital 5G projects in border areas, per the report. The Ministry of Home Affairs also raised security concerns over Huawei’s participation in the 5G spectrum auction later this year. India plans to launch 5G connectivity on mobile networks by next year.

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