International Regulatory Enforcement (PHIRE)

Commerce Simplifies—but Expands—the Foreign Direct Product Rule for Huawei

August 19, 2020

Tom Best, Behnam Dayanim, Scott Flicker, Charles A. Patrizia, Haiyan Tang, Shaun Wu & Talya Hutchison

On Monday, August 17, the Department of Commerce Bureau of Industry and Security (“BIS”) took new action directed at Huawei and its Entity List‑designated affiliates by not only letting the Temporary General License ("TGL") expire and adding an additional 38 Huawei affiliates to the Entity List, but also further revising the foreign direct product rule as applied to Huawei. This latest action by BIS adds to existing restrictions to prohibit the transfer to Huawei of any foreign‑produced item that is either: (a) the direct product of specified software or technology subject to the EAR; or (b) produced by a plant or major component of a plant that is, itself, the direct product of specified U.S.‑origin software or technology.

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