US eases restrictions on Chinese company Huawei to keep mobile networks in business

(Reuters) – The US government eased on Monday some restrictions imposed last week on the Chinese company Huawei, a sign that the bans imposed on the telecommunications company could have significant and unforeseen consequences.

The US Department of Commerce will allow Huawei Technologies Co Ltd to purchase US-made products to maintain existing networks and provide software updates for existing Huawei handsets.

The company is still prohibited from buying US parts and components to manufacture new products without license approval, which could be denied.

The cancellation, which lasts 90 days, suggests that changes to Huawei's supply chain could have immediate, profound and unexpected consequences.

"It seems like the intention is to limit unintended impacts on third parties using Huawei equipment or systems," said Washington lawyer Kevin Wolf, formerly head of the Commerce Department. "It seems like they are trying to prevent network outages."

Huawei did not immediately respond to a request for comment.

On Thursday, the US Department of Commerce added Huawei and 68 entities to a blacklist of exports that makes it almost impossible for the Chinese company to buy products made in the United States. Huawei is now on a list of banned business entities with unlicensed US companies that will be extremely difficult to obtain.

Reuters reported Friday that the department plans to temporarily relocate companies and people with Huawei equipment to maintain the reliability of their networks and communications equipment, according to a government spokesman.

Monday's posting indicates that the stay was created in the form of a temporary general license, in effect until Aug. 19, which allows Huawei to purchase products to service existing networks, as well as to provide software updates to existing Huawei handsets.

The list of entities identifies companies suspected of being involved in activities contrary to the US interests of national security or foreign policy.

Reuters said Sunday that Google has suspended its activities with Google's Huawei, requiring the transfer of hardware, software and technical services, with the exception of those available to the public via open source licenses, citing a source close to folder.