The Bureau of Industry and Security (BIS) of the US Department of Commerce announced on May 15, 2019, that it is adding China's Huawei Technologies Co. Ltd. and its 70 worldwide affiliates to the Bureau’s Entity List. American technology that is sold or transferred to a company or person on the BIS Entity List is required to have a license from the BIS, there are times that a license is denied because the said sale or transfer would cause harm to US national security or foreign policy interests.

Alleged charges against Huawei

The Bureau placed Huawei and its affiliates on its export blacklist after it established, from information available, that Huawei has more than likely employed activities that are against US security and foreign policies.

Information used includes the January 2019 public superseding indictment filed against Huawei by the Department of Justice, alleged violations of the International Emergency Economic Powers Act (IEEPA), conspiracy to help Iran with prohibited financial services and conspiracy to commit money laundering.

Security risk

The US Department of Commerce officials stated that, by being blacklisted, Huawei would find it hard to sell many of their products because they rely heavily on US suppliers. According to RCR Wireless News, Huawei officials said that they would look for solid remedies and find a resolution. They also felt the move would hurt the American companies they do business with as well break the mutual trust they have established.

Officials from China expressed that they oppose the action and would take steps to protect Chinese companies. US officials stated that the action was necessary because of Huawei connection to the People's Republic of China (PRC), that not only practice espionage but cyber-warfare.

Executive order signed

Yesterday, President Trump signed an executive order declaring that all technology transactions constituting a threat to national security are prohibited when it involves information, communications, and technology services designed, developed, manufactured, or supplied by foreign adversaries.

The President declared this order as a national emergency. He also directed all agencies of the US Government to take all appropriate measures within their authority to adopt appropriate rules and regulations to identify and scrutinize countries or persons with respect to transactions involving information and communications technology and services supply chain. Final determination of which transaction would constitute a threat was left in the hands of the Secretary of Commerce, Wilbur Ross.