The Trump administration reportedly does not see any loopholes in the new rule it introduced to crimp global chip sales to Huawei, one of the world’s biggest Chinese telecommunications equipment company, which it has been targeting over national security concerns. The U.S. government has also made clear its intention to aggressively crack down upon any bid that looks to disobey the new rule’s intent, claimed Commerce Secretary, Wilbur Ross.
The new rule, introduced in May, allows U.S. authority to require licenses for the delivery of a number of foreign-manufactured chips to Huawei. The rule was drafted after China hardliners in the government showed frustration over the fact the telecom giant’s blacklisting in 2019 by the U.S. government did not do enough to sever its access to global supplies.
However, industry lawyers and a number of lawmakers find this rule to be highly complex, ambiguous, and full of gaps, that few allege leave crucial transactions away from the purview of the controls.
Wilbur Ross stated that no loopholes were seen by the Department of Commerce in the new rule. Ross also confirmed that the department would implement this rule religiously and would pursue any attempt that looks to evade its intent.
This statement comes after the Department of Commerce recently sent a letter to a number of semiconductor producers and designers to shed some more light on the new rule. However, the industry lawyers stated that the guidance gave only a little clarity.
Matthew Borman, an official working at the Commerce Department, in the June 16 letter to the suppliers, stated that that the Commerce Department would like issue an alert to a recent change to the U.S. Export Administration Regulations that might affect the business that is done with Huawei Technologies, HiSilicon, as well as its other affiliates of Huawei.
HiSilicon is a chip subsidiary of Huawei. The company’s listing in the U.S. blacklist in 2019 forced a number of suppliers to get licenses to ship chips to HiSilicon.
The new rule further expands U.S. government’s authority to mandate licenses to allow the sales of semiconductors, that were designed by the company and made abroad with U.S. equipment, to Huawei. It also mandates companies to get licenses from the U.S. if they intend to knowingly sell foreign-made equipment, that are developed using certain U.S. software and technology, to Huawei.