Tuesday, December 6, 2022

Huawei, SMIC suppliers received billions worth of licenses for U.S. goods

Despite being on a US trade blacklist, suppliers to Chinese telecoms giant Huawei and China’s top chipmaker SMIC received billions of dollars in permits to sell them goods and technology from November to April, according to records revealed by Congress on Thursday.

113 export permits worth $61 billion were issued for vendors to ship equipment to Huawei (HWT.UL), according to the records, while another 188 licenses worth almost $42 billion were approved for Semiconductor Manufacturing International Corp (SMIC) (0981. HK).

Over 9 out of 10 license applications were granted to SMIC suppliers, while 69 percent of requests to supply to Huawei were accepted during the same time period, according to the statistics.

The Foreign Affairs Committee of the United States House of Representatives decided on Thursday to allow a request by senior Republican member Michael McCaul to share licensing data obtained from the Commerce Department in May.

The figures infuriated Washington’s China hawks, who have made a deliberate effort to deny Chinese corporations access to advanced American technology.

Due to national security concerns, Huawei was placed on a trade blacklist in May 2019, requiring its U.S. suppliers and others to obtain special permission to transport goods to it. SMIC was placed on the so-called entity list in December 2020, on concerns that it could be used to divert advanced technology to military users.

The bulk of the licenses given did not allow for sensitive item shipments. During that time, Huawei received 113 permits, 80 of which were for non-sensitive items that only required a license since the recipient was blacklisted. The figure for SMIC was 121 out of 188.

In most cases, licenses are valid for four years.

Reuters reported earlier this year that after Huawei was blacklisted, the Trump government authorized $87 billion in licenses for the company.