51596 Federal Register / Vol. 85, No. 162 / Thursday, August 20, 2020 / Rules and Regulations DEPARTMENT OF COMMERCE 660–0144 or (408) 998–8806 or email following foreign-produced items will your inquiry to: [email protected]. now apply when there is knowledge Bureau of Industry and Security SUPPLEMENTARY INFORMATION: that either the foreign-produced item will be incorporated into, or that the 15 CFR Parts 736, 744 and 762 Background foreign-produced item will be used in [Docket No. 200813–0225] Huawei Technologies Co., Ltd. the ‘‘production’’ or ‘‘development’’ of (Huawei) and sixty-eight of its non-U.S. any ‘‘part,’’ ‘‘component,’’ or RIN 0694–AH99 affiliates were added to the Entity List ‘‘equipment’’ produced, purchased, or effective May 16, 2019 (84 FR 22961, ordered by any entity with a footnote 1 Addition of Huawei Non-U.S. Affiliates May 21, 2019). Effective August 19, designation in the license requirement to the Entity List, the Removal of 2019 (84 FR 43487, August 21, 2019), an column of this supplement; or when any Temporary General License, and additional forty-six non-U.S. affiliates entity with a footnote 1 designation in Amendments to General Prohibition were placed on the Entity List. Their the license requirement column of this Three (Foreign-Produced Direct addition to the Entity List imposed a supplement is a party to any transaction Product Rule) licensing requirement under the Export involving the foreign-produced item, AGENCY: Bureau of Industry and Administration Regulations (EAR) e.g., as a ‘‘purchaser,’’ ‘‘intermediate Security, Commerce. regarding the export, reexport, or consignee,’’ ‘‘ultimate consignee,’’ or transfer (in-country) of most items ACTION: Final rule. ‘‘end-user.’’ These revisions promote subject to the EAR to any of these one U.S. national security by limiting access SUMMARY: Huawei Technologies Co., hundred and fifteen listed Huawei to, and use of, U.S. technology to design Ltd. (Huawei) and a number of non-U.S. entities. With this final rule, in order to and produce items outside the United affiliates have been placed on the Entity better address the continuing threat to States by entities that pose a significant List. In order to further address the U.S. national security and U.S. foreign risk of involvement in activities continuing threat to U.S. national policy interests posed by Huawei and its contrary to the national security or security and foreign policy interests non-U.S. affiliates, the Bureau of foreign policy interests of the United posed by Huawei and its non-U.S. Industry and Security (BIS) is making States. In order to assist the public to affiliates, the Bureau of Industry and three sets of changes to controls for more easily follow the description of Security (BIS) in this final rule is Huawei and its non-U.S. affiliates under these changes in this rule, BIS describes making three sets of changes to controls the EAR. these changes under three sections in for Huawei and its listed non-U.S. First, BIS is adding thirty-eight the Background section of this rule: (A) affiliates under the Export additional non-U.S. affiliates of Huawei Additional Non-U.S. Affiliates of Administration Regulations (EAR). First, to the Entity List because they also pose Huawei Added to the Entity List and BIS is adding additional non-U.S. a significant risk of involvement in Revisions to Current Entries on the affiliates of Huawei to the Entity List activities contrary to the national Entity List; (B) Removal of Temporary because they also pose a significant risk security or foreign policy interests of the General License (TGL) and Conforming of involvement in activities contrary to United States. This rule also revises the Changes to Entity List for TGL Removal; the national security or foreign policy Huawei entry and the entries of three and (C) Changes to General Prohibition interests of the United States. Second, existing Huawei affiliate entries on the Three—The Foreign–Produced Direct this rule removes a temporary general Entity list, two under the destination of Product Rule. license for Huawei and its non-U.S. China and one under Brazil. Second, this rule removes a temporary A. Additional Non-U.S. Affiliates of affiliates and replaces those provisions general license for Huawei and its non- Huawei Placed on the Entity List and with a more limited authorization that U.S. affiliates and replaces those Revisions to Current Entries on the will better protect U.S. national security provisions with a more limited Entity List and foreign policy interests. Third, in permanent authorization that will response to public comments, this final 1. Additions of Non-U.S. Affiliates of further protect U.S. national security Huawei to the Entity List rule amends General Prohibition Three, and foreign policy interests. This rule also known as the foreign-produced also makes conforming changes to all of The Entity List (supplement no. 4 to direct product rule, to revise the control the entries for Huawei and non-U.S. part 744 of the EAR) identifies entities over certain foreign-produced items affiliates that were added to the Entity for which there is reasonable cause to recently implemented by BIS. These List effective May 16, 2019, and believe, based on specific and revisions are consistent with the effective August 19, 2019, as well as for articulable facts, that the entities have authority provided by the Export the thirty-eight additional non-U.S. been involved, are involved, or pose a Control Reform Act of 2018 (ECRA). affiliates of Huawei being added to the significant risk of being or becoming DATES: This rule is effective August 17, Entity List with this rule, to reflect the involved in activities contrary to the 2020. removal of the temporary general national security or foreign policy FOR FURTHER INFORMATION CONTACT: For license and the more limited permanent interests of the United States. The EAR questions on the foreign direct product authorization which is being (15 CFR parts 730–774) impose change, contact Sharron Cook, Senior implemented in this rule by excluding additional license requirements on, and Export Policy Analyst, Regulatory certain additional specified exports, limit the availability of most license Policy Division, Office of Exporter reexports, and transfers (in-country) exceptions for exports, reexports, and Services, Bureau of Industry and from the License Requirement column transfers (in-country) involving listed Security, Department of Commerce, for entries for Huawei and its non-U.S. entities. The license review policy for Phone: (202) 714–6685 or email your affiliates on the Entity List. each listed entity is identified in the inquiry to: [email protected]. Third, this final rule amends General ‘‘License review policy’’ column on the For other questions on this rule, contact Prohibition Three, also known as the Entity List, and the impact on the the Director, Office of Exporter Services, foreign-produced direct product rule, to availability of license exceptions is Bureau of Industry and Security, revise the control over certain foreign- described in the relevant Federal Department of Commerce, Phone: (949) produced items. The control of the Register document adding entities to the VerDate Sep<11>2014 19:12 Aug 19, 2020 Jkt 250001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 E:\FR\FM\20AUR2.SGM 20AUR2 jbell on DSKJLSW7X2PROD with RULES2 Federal Register / Vol. 85, No. 162 / Thursday, August 20, 2020 / Rules and Regulations 51597 Entity List. BIS places entities on the one different destinations: The People’s exporters, reexporters, and transferors in Entity List pursuant to part 744 (Control Republic of China (China), Argentina, identifying entities on the Entity List. Policy: End-User and End-Use Based) Brazil, Chile, Egypt, France, Germany, For the reasons described above, this and part 746 (Embargoes and Other India, Israel, Mexico, Morocco, the final rule adds the following thirty-eight Special Controls) of the EAR. Netherlands, Peru, Russia, Singapore, entities to the Entity List: The End-User Review Committee South Africa, Switzerland, Thailand, China (ERC), composed of representatives of Turkey, the United Arab Emirates, and the Departments of Commerce (Chair), the United Kingdom. This rule lists • Huawei Cloud Computing State, Defense, Energy and, where entities that are located in China’s Hong Technology; appropriate, the Treasury, makes all Kong Special Administrative Region • Huawei Cloud Beijing; decisions regarding additions to, (HKSAR) under the Entity List heading • Huawei Cloud Dalian; removals from, or other modifications to for China, consistent with the • Huawei Cloud Guangzhou; the Entity List. The ERC makes all suspended application of Section 201 of • Huawei Cloud Guiyang; decisions to add an entry to the Entity the United States-Hong Kong Policy Act • Huawei Cloud Shanghai; List by majority vote and all decisions of 1992 (Pub. L. 102–393) to ECRA by • Huawei Cloud Shenzhen; to remove or modify an entry by Executive Order 13936, July 14, 2020. • Huawei OpenLab Suzhou; and unanimous vote. The ERC made the decision to add each • Wulanchabu Huawei Cloud Huawei and sixty-eight of its non-U.S. of the thirty-eight entities described Computing Technology. affiliates were added to the Entity List below under the standard set forth in Argentina effective May 16, 2019 (84 FR 22961, § 744.11(b) of the EAR. Without the • May 21, 2019), (hereinafter the ‘‘May 21 imposition of a license requirement to Huawei Cloud Argentina. rule’’). Effective August 19, 2019, an these affiliated entities, there is Brazil additional forty-six non-U.S. affiliates reasonable cause to believe that Huawei • were placed on the Entity List (84 FR would seek to use them to evade the Huawei Cloud Brazil. 43493, Aug. 21, 2019), (hereinafter the restrictions imposed by its addition to Chile ‘‘August 21 rule’’).