Huawei, SMIC Suppliers Receive Licenses Worth Billions of Dollars for Exporting U.S. Goods

huawei
(Source: CIO Bulletin)

Reuters reported on Friday that it had received documents showing that although Chinese telecoms giant Huawei and China’s top chipmaker Semiconductor Manufacturing International Corporation (SMIC) were included on the U.S. trade blacklist, they still obtained U.S. technology and goods export licenses worth billions of dollars from November last year to April this year. Neither company has yet responded to this revelation.

Huawei was placed on a trade blacklist by the U.S. in May 2019 due to alleged national security issues. The list, first published by the country’s Department of Commerce in February 1997, includes all users deemed to be involved in activities that are risky for national security, thus explicitly informing exporters that they must not assist these entities in acquiring any items subject to this regulation without a license. This list forces American suppliers and others to obtain special licenses in order to ship goods to Huawei.

SMIC was added to the so-called ‘Entities List’ in December 2020 amid concerns it could transfer advanced technology to military users.

According to the documents, 113 export licenses worth $61 billion were approved for suppliers to ship products to Huawei. In addition, another 188 licenses valued at nearly $42 billion were given the green light for SMIC.

The data also showed that more than nine out of 10 license applications were awarded to SMIC suppliers, while 69% of applications for shipments to Huawei were approved during the same period.

The Commerce Department said that approved license applications do not represent actual shipments and that only around half of all licenses are used. It added that license applications involving Huawei and SMIC are processed under policies developed by the Trump administration and maintained by the Biden administration.

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Reuters also stressed that a majority of the licenses granted did not authorize shipments of sensitive items. Of the 113 licenses approved for Huawei during the period, 80 were for non-sensitive items that only required a license because the recipient was blacklisted. For SMIC, the figure was 121 of 188.