Exclusive: US companies can get a nod to boost Huawei's sales in 2-4 weeks – official

WASHINGTON (Reuters) – The US could approve licenses to allow companies to resume sales at Huawei two weeks ago, a senior US official said.

Huawei, the world's largest manufacturer of telecommunications equipment, was added to a Commerce list in May, banning US companies from supplying it with new US-made products and services unless licenses that would probably be refused.

But at the end of last month, after meeting with Chinese President Xi Jinping, President Donald Trump announced that US companies could sell their products to Huawei. And in recent days, US Secretary of Commerce, Wilbur Ross, has said that licenses would be issued without threat to national security.

The reversal of Trump and rapid implementation by the Commerce Department suggest that the flea industry lobbying, coupled with Chinese political pressure, could well boost US technology sales to Huawei.

Two US chip makers that supply Huawei have told Reuters in recent days that they would ask for more licenses after Ross's comments. They asked to remain anonymous.

A customer response management company and a company simulating a crossover radar for Huawei are also likely to file claims in the coming days, according to Craig Ridgley, a business compliance consultant in Washington.

Of the $ 70 billion spent by Huawei in 2018 on component purchases, about $ 11 billion went to US companies, including Qualcomm (QCOM.O), Intel (INTC.O) and Micron Technology (MU.O).

"As there is no problem, companies submit applications, as provided by regulation," said Washington lawyer Kevin Wolf, former head of the Commerce Department.

A spokesman for Huawei said: "The restrictions on the list of entities should be completely removed, instead of applying temporary licenses to US sellers. Huawei has not been found guilty of any relevant offense and does not represent any cybersecurity risk for any country, so the restrictions are not respected. "

US companies can currently sell products to maintain existing networks and update existing Huawei handset software, but are not allowed to make new sales of US-made products and services.

In addition, all US sales to Huawei do not depend on government approval of license applications. Some US chip manufacturers' sales to Huawei may not require licenses as their products may be beyond the control of US exports, as many are manufactured abroad with few US components.

US officials have sought to clarify the new policy in recent weeks, saying that they would allow the sale of non-sensitive technologies easily available abroad if national security was protected. But they also reiterated that Huawei remained on the list of entities and that the recovery would be temporary.

The US semiconductor industry has lobbied for broader relief, arguing that US security objectives should be advanced in a way that does not compromise global competitiveness and retain technological leadership. Suppliers want to be allowed to provide customer service to the chips that they build and sell abroad or to approve the shipment of new US-made equipment to Huawei and its affiliates worldwide.

It remains to be seen which products will get licenses. Some US suppliers have sought clarification at a conference this week in Washington in the Commerce Department.

A senior US official told a representative of the manufacturer that licenses could be granted within two to four weeks at Thursday's conference.

The person, who did not want to be identified, stated that the manager had not defined the criteria for approving the licenses, but that she had left, persuaded that it would be made at the same time. case by case, at least initially, as requested by the agency. to form broader opinions.

Asked for advice from the top official, a spokesman for the Commerce Department said the agency "was evaluating all licenses and determining what was in the best interest of the country's national security."

The United States has pending cases against Huawei for allegedly stealing US intellectual property and violating the sanctions imposed by Iran. It also launched a lobbying effort to convince its allies to keep Huawei out of the next generation 5G telecommunications infrastructure, citing concerns that the company could spy on its customers. Huawei denied the allegations.

Eric Hirschhorn, a former Undersecretary of Commerce, said the problem for government officials who are currently reviewing licenses is that they do not know where the administration is going.

"The policy of two minutes ago may not be in two minutes," Hirschhorn said.