Temporary General License: Extension of Validity, Clarifications to Authorized Transactions, and Changes to Certification Statement Requirements, 43487-43493 [2019-17920]

Agencies

• DEPARTMENT OF COMMERCE
• Bureau of Industry and Security

[Federal Register Volume 84, Number 162 (Wednesday, August 21, 2019)]
[Rules and Regulations]
[Pages 43487-43493]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-17920]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 744 and 762

[Docket No. 190814-0012]
RIN 0694-AH86


Temporary General License: Extension of Validity, Clarifications 
to Authorized Transactions, and Changes to Certification Statement 
Requirements

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

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SUMMARY: On May 16, 2019, Huawei Technologies Co., Ltd. (Huawei) and 
sixty-eight of its non-U.S. affiliates were added to the Entity List. 
Their addition to the Entity List imposed a licensing requirement under 
the Export Administration Regulations (EAR) regarding the export, 
reexport, or transfer (in-country) of any item subject to the EAR to 
any of these 69 listed Huawei entities. The Entity List-based licensing 
requirement applied in addition to any other license requirement, if 
any, applicable under the EAR to the transaction in question. On May 
22, 2019, the Bureau of Industry and Security (BIS) published a 
temporary general license, effective May 20, 2019, that modified the 
effect of the listing in order to temporarily authorize engagement in 
certain transactions, involving the export, reexport, or transfer (in-
country) of items subject to the EAR to the 69 listed Huawei entities. 
The U.S. Government has decided to extend the temporary general license 
through November 18, 2019. In order to implement this decision, this 
final rule revises the temporary general license to remove the 
expiration date of August 19, 2019, and substitutes the date of 
November 18, 2019. This final rule also makes certain clarifying 
changes to the authorized transactions under the temporary general 
license to improve public understanding. Lastly, this final rule 
revises the temporary general license by changing which party to the 
transaction is required to create the certification statement by 
requiring that the exporter, reexporter, or transferor obtain a 
certification statement from the pertinent Huawei listed entity prior 
to using the temporary general license. Concurrently with the this 
final rule, BIS is also publishing elsewhere in this issue of the 
Federal Register the final rule, Addition of Certain Entities to the 
Entity List and Revision of Entries on the Entity List. This final 
rule, as a conforming change for the addition of these other non-U.S. 
affiliates of Huawei to the Entity List, revises the temporary general 
license to include those additional Huawei affiliates within the scope 
of the temporary general license.

DATES: This rule is effective August 19, 2019 through November 18, 
2019, except for amendatory instructions 1 and 3, which are effective 
August 19, 2019. The expiration date of the final rule published on May 
22, 2019 (84 FR 23468) is extended until November 18, 2019.

FOR FURTHER INFORMATION CONTACT: Director, Office of Exporter Services, 
Bureau of Industry and Security, Department of Commerce, Phone: (949) 
660-0144 or (408) 998-8806 or email your inquiry to: 
[email protected].

SUPPLEMENTARY INFORMATION: 

Background

    As published on May 22, 2019, the temporary general license 
authorizes certain activities, including those necessary for the 
continued operations of existing networks and to support existing 
mobile services, including cybersecurity research critical to 
maintaining the integrity and reliability of existing and fully 
operational networks and equipment. Exporters, reexporters, and 
transferors are required to maintain certifications and other records, 
to be made available when requested by BIS, regarding their use of the 
temporary general license.
    As published on May 22, 2019, and as revised and clarified by this 
final rule, any exports, reexports, or in-country transfers of items 
subject to the EAR to any of the 69 listed Huawei entities continue to 
require a license based on their addition to the Entity List, with the 
exception of transactions explicitly authorized by the temporary 
general license and eligible for export, reexport,

[[Page 43488]]

or transfer (in-country) prior to May 16, 2019, without a license or 
under a license exception. License applications will continue to be 
reviewed under a presumption of denial, as stated in the Entity List 
entries for the listed Huawei entities.
    No persons are relieved of other obligations under the EAR, 
including but not limited to licensing requirements to the People's 
Republic of China (PRC or China) or elsewhere and/or the requirements 
of part 744 of the EAR. The temporary general license also does not 
authorize any activities or transactions involving Country Group E 
countries (i.e., Cuba, Iran, North Korea, Sudan, and Syria) or foreign 
nationals.

Ninety-Day Extension of Validity

    At this time, the U.S. Government has decided to extend the 
temporary general license until November 18, 2019, as revised and 
clarified as described below. In order to implement this U.S. 
Government decision, this final rule revises the temporary general 
license to remove the date of August 19, 2019, and substitutes the date 
of November 18, 2019, in the introductory text and in paragraph (b)(1) 
of the temporary general license and in the introductory text of 
paragraph (c) of Supplement No. 7 to part 744.

Conforming Change for Additional Huawei Affiliates Added to the Entity 
List

    Concurrently with the this final rule, BIS is also publishing 
elsewhere in this issue of the Federal Register the final rule, 
Addition of Certain Entities to the Entity List and Revision of Entries 
on the Entity List. The other rule adds forty-six additional non-U.S. 
affiliates of Huawei to the Entity List because they also pose a 
significant risk of involvement in activities contrary to the national 
security or foreign policy interests of the United States. See the 
final rule in this same issue of the Federal Register for additional 
information.
    This final rule, as a conforming change for the addition of these 
other non-U.S. affiliates of Huawei to the Entity List, revises 
paragraph (a) (Identification of non-U.S. affiliates) by removing 
paragraphs (a)(1) to (a)(68) that identifies the non-U.S. affiliates 
each by name and adds in its place paragraphs (a)(1) and (a)(2) as a 
simpler method for identifying the non-U.S. affiliates of Huawei that 
are within the scope of the temporary general license. Paragraph (a)(1) 
will identify the non-U.S. affiliates added to the Entity List in the 
rule published on May 21, 2019 (84 FR 22961), and effective May 16, 
2019. Paragraph (a)(2) will identify the non-U.S. affiliates added to 
the Entity List with a reference to this final rule effective on August 
19, 2019.

Clarification of Authorized Transactions Under the Temporary General 
License

    The temporary general license includes paragraph (c) (Authorized 
transactions) that allows during the validity period of the temporary 
general license certain exports, reexports, and transfers (in-country) 
that meet specified criteria. As described below, this final rule 
removes paragraph (c)(4) without implicating the Entity List-based 
license requirements for Huawei and its non-U.S. affiliates on the 
Entity List. Since the temporary general license became effective on 
May 20, 2019, BIS has received a number of questions regarding the 
temporary general license and many of these questions have requested 
clarification regarding the scope of paragraph (c)(1), (2), or (4). BIS 
intends to soon post on its website Frequently Asked Questions (FAQs) 
and other guidance to answer the questions received that have broad 
applicability to exporters, reexporters, and transferors. In addition, 
BIS has identified certain clarifying changes that should be made to 
paragraph (c) to improve public understanding of the intended scope of 
the temporary general license.
    This final rule revises paragraph (c)(1) (Continued operation of 
existing networks and equipment) by adding a new paragraph (c)(1)(i) 
(Exclusions) to clarify that the scope of the paragraph (c)(1) 
authorization does not include certain exports, reexports, or transfers 
(in-country) for existing networks. This final rule adds an exclusion 
under paragraph (c)(1)(i)(A) to specify that end-devices such as 
general-purpose computing devices are not considered to be part of an 
existing and fully operational network. This exclusion also specifies 
that equipment that is not directly related to the support and 
maintenance of the network is excluded. An exclusion also is added 
under new paragraph (c)(1)(i)(B) to specify that transfers of equipment 
for general business purposes or for activities that are not in direct 
support of an existing and fully operational network are not included 
in the temporary general license. This final rule also adds a 
parenthetical phrase to provide an illustrative example of 
semiconductor production equipment as a type of equipment that would be 
excluded under paragraph (c)(1) of the temporary general license. 
Lastly, this final rule adds clarifying text to the introductory text 
of paragraph (c)(1) to specify that software for bug fixes, security 
vulnerability patches, and other updates to existing versions of the 
software necessary to maintain and support existing and currently 
`fully operational networks' and equipment are under paragraph (c)(1) 
of the temporary general license, provided the software does not 
enhance the functional capacities of the original software or 
equipment. The May 22 rule used the phrase `software updates and 
patches.' This final rule replaces that text with more specific text to 
improve public understanding for what software is eligible under 
paragraph (c)(2). This final rule makes this same type of software 
clarification to paragraph (c)(2) described below.
    This final rule adds and reserves paragraph (c)(1)(ii) to conform 
to Federal Drafting Handbook requirements for the addition of paragraph 
(c)(1)(i).
    To clarify the scope of paragraph (c)(1) to address questions 
received from the public, this final rule adds two new notes to 
paragraph (c)(1). New Note 1 to paragraph (c)(1) clarifies the intended 
meaning of the terms `third party' and `third parties' as used in the 
paragraph (c)(1) authorization. The note specifies that a `third party' 
is intended to be a party such as a telecommunication service provider, 
and does not include or refer to any of the Huawei listed entities or 
exporter, reexporter, or transferor.
    New Note 2 to paragraph (c)(1) clarifies the intended meaning of 
the term `fully operational network,' as used in paragraphs (c)(1) and 
(3). The new Note 2 specifies that a `fully operational network' means 
a `third party' network that is providing services to that `third 
party's' customers. Paragraph (c)(2) of the temporary general license 
authorizes engagement in transactions necessary to support, including 
through software updates and patches, existing models of Huawei 
`personal consumer electronic devices,' which is being added in place 
of the undefined term `handsets' that appeared in the temporary general 
license as published on May 22, 2019. This final rule removes the term 
handsets from paragraph (c)(2) and replaces it with the defined term 
`personal consumer electronic devices,' which includes phones and other 
personally-owned equipment, such as tablets, smart watches, and mobile 
hotspots such as MiFi devices.
    This final rule also clarifies, to address questions from the 
public, that transactions under paragraph (c)(2) include support for 
personal use of the telecommunications hardware known as customer 
premises equipment (CPE),

[[Page 43489]]

such as network switches, residential internet gateways, set-top boxes, 
home networking adapters and other personally-owned equipment that 
enable consumers to access network communications services and 
distribute them within their residence or small business. Support of 
CPE is an additional example of the types of basic consumer or small 
business types of applications that were intended to be included within 
the scope of paragraph (c)(2). This final rule adds a definition of 
`Customer Premises Equipment (CPE)' to paragraph (c)(2). As with the 
remainder of paragraph (c)(2), the authorization is limited to models 
of CPE that were available to the public on or before May 16, 2019.
    Lastly, this final rule adds clarifying text to paragraph (c)(2) to 
specify that software for bug fixes, security vulnerability patches, 
and other updates to existing versions of the software necessary to 
provide service and support to existing `personal consumer electronic 
devices' and CPE are under paragraph (c)(2) of the temporary general 
license, provided the software does not enhance the functional 
capacities of the original software or equipment. The May 22 rule used 
the phrase `software updates and patches.' This final rule replaces 
that text with more specific text to improve public understanding for 
what software is eligible under paragraph (c)(2). As noted above, this 
final rule makes this same type of software clarification to the 
introductory text of paragraph (c)(1).
    This final rule removes paragraph (c)(4) (Engagement as necessary 
for development of 5G standards by a duly recognized standards body). 
BIS has determined that existing provisions of the EAR suffice for 
purposes of addressing the application of the Entity List-based license 
requirements to activities in connection with standards development 
bodies, including 5G standards bodies. BIS has posted a general 
advisory opinion in the FAQ section of the BIS website under 
``Published Technology and Software (Sec.  734.7),'' at https://www.bis.doc.gov/index.php/documents/compliance-training/export-administration-regulations-training/1554-ear-definitions-faq/file, 
relating to standards development activities. As discussed in the 
general advisory opinion, the disclosure to any of the Huawei listed 
entities of technology or software subject to the EAR would be a 
prohibited activity absent a license from BIS. Information, including 
technology, that is made available to the public without restrictions 
upon its further dissemination would not be subject to the EAR if the 
existing criteria of Sec.  734.7 are met.
    BIS has also received questions on the following issues regarding 
the treatment of imports and services involving Huawei and its sixty-
eight non-U.S. affiliates on the Entity List:
     Treatment of imports into the United States. The Entity 
List does not create a license requirement for imports, including 
imports from entities on the Entity List.
     Treatment of services. The Entity List-list based license 
requirements apply to the export, reexport, and transfer (in-country) 
of items that are subject to the EAR. The Entity List-based license 
requirements do not apply to services, provided the service in question 
does not involve the export, reexport, or transfer (in-country) of 
items that are subject to the EAR. As part of providing a service, a 
person must determine whether there will be an export, reexport, or 
transfer (in-country) of any commodities, software, or technology 
requiring an EAR authorization. In addition, certain services may be 
controlled or prohibited under the EAR for other reasons. For example, 
a U.S. person is prohibited from engaging in exports, reexports, or 
transfers (in-country) related to certain end uses (as specified in 
Sec.  744.6) or service an item subject to the EAR with ``knowledge'' 
of a violation (as specified in Sec. Sec.  764.2(e) and 736.2(b)(10)).

Changes to Certification Statement Under Temporary General License and 
Conforming Change to EAR Recordkeeping Requirement

    This final rule revises paragraph (d) (Certification statement) of 
the temporary general license by changing which party to the 
transaction is required to create the certification statement. This 
final rule removes the requirement under paragraph (d) for the 
exporter, reexporter, or transferor to create a certification statement 
and adds in its place a requirement under paragraph (d) that the 
exporter, reexporter, or transferor obtain a certification statement 
and any additional support documentation needed to substantiate the 
certification statement from the listed Huawei entity that is to 
receive the items. The certification statement must be obtained from 
the pertinent Huawei entity prior to exporting, reexporting, or 
transferring (in-country) any item under the temporary general license. 
This final rule also makes other clarifying changes to paragraph (d) 
related to the obligations of the parties to the transaction as it 
relates to the certification statement.
    This final rule makes changes to paragraph (d) by redesignating 
some of the text as introductory text to paragraph (d), deleting 
certain text that is no longer needed, and adding new paragraphs (d)(1) 
(Certification statement required from Huawei or one of its listed non-
U.S. affiliates) and (d)(2) (Certification statements may be used for 
multiple exports, reexports, and transfers (in-country)), as described 
further below. Paragraph (d)(1) also adds a recordkeeping requirement 
to specify that the exporter, reexporter, or transferor and the 
pertinent Huawei entity are each responsible for retaining the 
certification statement and any additional support documentation needed 
to substantiate the certification statement for purposes of the EAR 
recordkeeping requirements under part 762.
    New paragraph (d)(1) describes the general requirements for the 
certification statement, e.g., that the certification statement must be 
in writing and must be obtained by the exporter, reexporter, or 
transferor prior to the export, reexport, or transfer (in-country) that 
is being made under the temporary general license. New paragraph (d)(1) 
also describes the types of documentation that is needed in order to 
confirm whether the criteria of paragraph (c)(1) are met when an 
export, reexport, or transfer (in-country) is in support of a `fully 
operational network.'
    This final rule adds paragraphs (d)(1)(i)-(v) to specify the 
information that must be included in the certification statement. 
Paragraph (d)(1)(i) requires identifying the Huawei entity receiving 
the items and making the certification statement, and paragraph 
(d)(1)(ii) requires identifying the items and quantity thereof (for 
tangible shipments of commodities and software) involved. The Huawei 
entity must also certify in a single certification statement that: 
Under paragraph (d)(1)(iii), the end-use of the items to be received 
will be for an end-use within the scope of a specified authorizing 
paragraph under paragraph (c) of the temporary general license; under 
paragraph (d)(1)(iv), the entity will comply with the recordkeeping 
requirements in part 762, including by providing copies of the 
certification statements and all other records required under the EAR 
to any authorized agent, official, or employee of BIS, the U.S. Customs 
Service, or any other agency of the U.S. Government as required in 
Sec.  762.7; and under paragraph (d)(1)(v), the individual signing the 
certification statement has sufficient authority to legally bind the 
entity.

[[Page 43490]]

    This final rule also adds a new paragraph (d)(2) (Certification 
statements may be used for multiple exports, reexports, and transfers 
(in-country)) to clarify that certification statements obtained under 
paragraph (d)(1) may be used for multiple exports, reexports, or 
transfers (in-country) of the same item(s) under the temporary general 
license provided the information included in the certification 
statement is still accurate for those additional exports, reexports, or 
transfers (in-country). New paragraph (d)(2) specifies that if multiple 
exports, reexports, or transfers (in-country) are made against the same 
certification statement obtained under paragraph (d)(1), the exporter, 
reexporter, or transferor relying on that certification statement must 
maintain a log or other similar record that identifies each item and 
the quantity thereof for each export reexport, or transfer (in-country) 
made against that specific certification statement. Lastly, paragraph 
(d)(2) requires the log or other similar record be retained in 
accordance with the part 762 recordkeeping requirements.
    As a conforming change, in Sec.  762.2 (Records to be retained), 
this final rule revises paragraph (b)(55) to reference the log or other 
similar record required by paragraph (d)(2) if multiple exports, 
reexports, or transfers (in-country) are made against the same 
paragraph (d)(1) certification statement and any additional support 
documentation needed to substantiate the certification statement.

Export Control Reform Act of 2018

    On August 13, 2018, the President signed into law the John S. 
McCain National Defense Authorization Act for Fiscal Year 2019, which 
included the Export Control Reform Act of 2018 (ECRA). ECRA, as amended 
(50 U.S.C. 4801-4852), provides the legal basis for BIS's principal 
authorities and serves as the authority under which BIS issues this 
rule. As set forth in section 1768 of ECRA, all delegations, rules, 
regulations, orders, determinations, licenses, or other forms of 
administrative action that have been made, issued, conducted, or 
allowed to become effective under the Export Administration Act of 1979 
(50 U.S.C. 4601 et seq.) (as in effect prior to August 13, 2018 and as 
continued in effect pursuant to the International Emergency Economic 
Powers Act (50 U.S.C. 1701 et seq.) and Executive Order 13222 of August 
17, 2001, 3 CFR, 2001 Comp., p. 783 (2002), as amended by Executive 
Order 13637 of March 8, 2013, 78 FR 16129 (March 13, 2013), and as 
extended by the Notice of August 8, 2018, 83 FR 39871 (August 13, 
2018)), or the Export Administration Regulations, and were in effect as 
of August 13, 2018, shall continue in effect according to their terms 
until modified, superseded, set aside, or revoked under the authority 
of ECRA.

Rulemaking Requirements

    1. Executive Orders 13563 and 12866 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This rule has been determined to be not significant for 
purposes of Executive Order 12866. This rule is not an Executive Order 
13771 regulatory action because this rule is not significant under 
Executive Order 12866.
    2. Notwithstanding any other provision of law, no person is 
required to respond to nor be subject to a penalty for failure to 
comply with a collection of information, subject to the requirements of 
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA), 
unless that collection of information displays a currently valid Office 
of Management and Budget (OMB) Control Number. This regulation involves 
collections previously approved by OMB under control number 0694-0088, 
Simplified Network Application Processing System, which includes, among 
other things, license applications and carries a burden estimate of 
42.5 minutes for a manual or electronic submission. Total burden hours 
associated with the PRA and OMB control number 0694-0088 are not 
expected to increase as a result of this rule.
    In addition to the one collection referenced above, the Commerce 
Department requested, and OMB authorized, emergency modification of a 
currently approved information collection 0694-0122, Miscellaneous 
Licensing Responsibilities and Enforcement, involved in today's rule, 
consistent with 5 CFR 1320.13. The modification of this additional 
information collection is needed because this final rule will impose 
requirements on exporters, reexporters, and transfers to obtain a 
certification statement from Huawei and its non-U.S. affiliates on the 
Entity List prior to receiving items under a temporary general license 
under the EAR.
    The total estimated annual burden hours for this collection will 
increase from 96,618 hours to 97,405 hours (an increase of 787 hours) 
due to the changes included in this final rule.
    This emergency collection is needed in order for today's rule to 
establish a requirement for exporters, reexporters, or transferors to 
obtain a certification statement from Huawei and its non-U.S. 
affiliates on the Entity List prior to making exports, reexports, or 
transfers (in-country) to these listed entities. This action is needed 
immediately to protect national security and foreign policy interests 
of the United States to help better ensure that exports, reexports, and 
transfers (in-country) being made under the temporary general license 
will be done in accordance with the requirements of the temporary 
general license.
    If this emergency collection were delayed to allow for public 
comment before becoming effective, U.S. national security and foreign 
policy interests may be undermined if exports, reexports, or transfers 
(in-country) are made under the temporary general license that should 
not have been. The certification requirement included in this final 
rule is added to ensure appropriate written communication is occurring 
between Huawei and its non-U.S. affiliates on the Entity List with 
exporters, reexporters, and transfers prior to items being exported, 
reexported, or transferred (in-country) under the temporary general 
license. BIS intends to publish a notice in the Federal Register 
informing the public that DOC submitted a request for an emergency 
collection and the request was approved by OMB.
    The Department has determined the following conditions have been 
met:
    a. The collection of information is needed prior to the expiration 
of time established under the PRA for normal clearance procedures.
    b. The collection of information between these parties to exports, 
reexports, and transfers (in-country) made under the temporary general 
license is essential to the mission of the Department, in particular to 
ensure the proper use of a temporary general license under the EAR.
    c. The use of normal clearance procedures is reasonably likely to 
prevent or disrupt the collection of information. Compliance with 
normal clearance procedures would prevent the collection of information 
between the parties and may increase the likelihood of exports, 
reexporters, or transfers (in-country) that would otherwise fall

[[Page 43491]]

outside the scope of the temporary general license.
    You may send comments regarding the collection of information 
associated with this rule, including suggestions for reducing the 
burden, to Jasmeet K. Seehra, Office of Management and Budget (OMB), by 
email to [email protected], or by fax to (202) 395-7285.
    3. This rule does not contain policies with Federalism implications 
as that term is defined in Executive Order 13132.
    4. Pursuant to section 1762 of ECRA, this action is exempt from the 
Administrative Procedure Act (5 U.S.C. 553) requirements for notice of 
proposed rulemaking, opportunity for public participation, and delay in 
effective date.
    5. Because a notice of proposed rulemaking and an opportunity for 
public comment are not required to be given for this rule by 5 U.S.C. 
553, or by any other law, the analytical requirements of the Regulatory 
Flexibility Act, 5 U.S.C. 601, et seq., are not applicable. 
Accordingly, no regulatory flexibility analysis is required and none 
has been prepared.

List of Subjects

15 CFR Part 744

    Exports, Reporting and recordkeeping requirements, Terrorism.

15 CFR Part 762

    Administrative practice and procedure, Business and industry, 
Confidential business information, Exports, Reporting and recordkeeping 
requirements.

    Accordingly, parts 744 and 762 of the Export Administration 
Regulations (15 CFR parts 730 through 774) are amended as follows:

PART 744--[AMENDED]

0
1. The authority citation for 15 CFR part 744 is revised to read as 
follows:

    Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50 
U.S.C. 1701 et seq.; 22 U.S.C. 3201 et seq.; 42 U.S.C. 2139a; 22 
U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 12058, 43 FR 20947, 3 CFR, 
1978 Comp., p. 179; E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 
608; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 12947, 
60 FR 5079, 3 CFR, 1995 Comp., p. 356; E.O. 13026, 61 FR 58767, 3 
CFR, 1996 Comp., p. 228; E.O. 13099, 63 FR 45167, 3 CFR, 1998 Comp., 
p. 208; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; E.O. 
13224, 66 FR 49079, 3 CFR, 2001 Comp., p. 786; Notice of August 8, 
2018, 83 FR 39871 (August 13, 2018); Notice of September 19, 2018, 
83 FR 47799 (September 20, 2018); Notice of November 8, 2018, 83 FR 
56253 (November 9, 2018); Notice of January 16, 2019, 84 FR 127 
(January 18, 2019).

Supplement No. 7 to Part 744--[AMENDED]

0
2. Supplement No. 7 to part 744 is amended by revising the introductory 
text of the supplement and paragraphs (a), (b)(1), (c), and (d) to read 
as follows:

Supplement No. 7 to Part 744--Temporary General License

    Notwithstanding the requirements and other provisions of Supplement 
No. 4 to this part, which became effective on May 16, 2019, as to 
Huawei Technologies Co., Ltd. (Huawei), Shenzhen, Guangdong, China, and 
its non-U.S. affiliates (listed in this supplement and Supplement No. 4 
to this part), the licensing and other requirements in the EAR as of 
May 15, 2019, are restored in part as of May 20, 2019, and through 
November 18, 2019, pertaining to exports, reexports, and transfers (in-
country) of items subject to the EAR to any of the listed Huawei 
entities. The licensing and other policies of the EAR that were in 
effect as of May 15, 2019, are available to export, reexport, or 
transfer (in-country) such items to the listed Huawei entities if the 
transaction meets the conditions of paragraph (b) of this supplement, 
is limited in scope to one or more of the activities described in 
paragraphs (c)(1) through (3) of this supplement, and if the 
transaction parties satisfy the requirements of paragraph (d)(1) of 
this supplement and, if applicable, paragraph (d)(2) of this 
supplement. Thus, for example, the authority of NLR or a License 
Exception that was available as of May 15, 2019, may be used in 
connection with a transaction as per this temporary general license.
    (a) Identification of non-U.S. affiliates. The non-U.S. affiliates 
to whom the licensing and other requirements of the EAR are restored as 
described herein are those Huawei entities and affiliates added to the 
Entity List through the Federal Register documents listed in paragraphs 
(a)(1) and (2) of this supplement:
    (1) Addition of Entities to the Entity List, published on 5/21/19.
    (2) Non-U.S. affiliates of Huawei added to the Entity List on 
August 19, 2019.
    (b) * * *
    (1) This temporary general license is effective from May 20, 2019, 
through November 18, 2019.
* * * * *
    (c) Authorized transactions. This temporary general license allows, 
from May 20, 2019, through November 18, 2019, the following:
    (1) Continued operation of existing networks and equipment. BIS 
authorizes, subject to other provisions of the EAR, engagement in 
transactions necessary to maintain and support existing and currently 
`fully operational network' and equipment, including software for bug 
fixes, security vulnerability patches, and other changes to existing 
versions of the software, subject to legally binding contracts and 
agreements executed between Huawei, or one of its listed non-U.S. 
affiliates, and `third parties' on or before May 16, 2019. Such 
transactions may not enhance the functional capacities of the original 
software or equipment.
    (i) Exclusions. (A) The authorization under paragraph (c)(1) of 
this supplement extends only to activities such as patching networks 
and network infrastructure equipment, not end-devices such as general-
purpose computing devices that would not be considered to be part of an 
existing and `fully operational network.' Paragraph (c)(1) of this 
supplement does not authorize support for equipment that is not 
directly related to the support and maintenance of the network.
    (B) The provision of the temporary general license under paragraph 
(c)(1) of this supplement does not authorize transfers of equipment for 
general business purposes or for activities that are not in direct 
support of an existing and `fully operational network' (e.g., 
semiconductor production equipment).
    (ii) [Reserved]

    Note 1 to paragraph (c)(1): The term `third parties' in 
paragraph (c)(1) of this supplement and the term `third party' in 
Notes 2 and 3 to paragraph (c)(1) refer to a party that is not 
Huawei, one of its listed non-U.S. affiliates, or the exporter, 
reexporter, or transferor, but rather an organization such as a 
telecommunications service provider.


    Note 2 to paragraph (c)(1):  The term `fully operational 
network' in paragraph (c)(1) of this supplement, as well as in 
paragraph (c)(3) of the supplement, refers to a `third party' 
network providing services to the `third party's' customers.

    (2) Support to existing `personal consumer electronic devices' and 
`Customer Premises Equipment (CPE)'. BIS authorizes, subject to other 
provisions of the EAR, engagement in transactions necessary to provide 
service and support, including software for bug fixes, security 
vulnerability patches, and other changes to existing versions of the 
software, to existing Huawei `personal consumer electronic devices.' 
Such transactions may not enhance the functional capacities of the 
original software or equipment. For the purposes of this paragraph 
(c)(2), the

[[Page 43492]]

term `personal consumer electronic devices' is defined as including 
phones and other personally-owned equipment, such as a tablets, smart 
watches, and mobile hotspots such as MiFi devices. The authorized 
transactions under this paragraph (c)(2) include support for personal 
use of telecommunications hardware known as `Customer Premises 
Equipment (CPE),' such as network switches, residential internet 
gateways, set-top boxes, home networking adapters and other personally-
owned equipment that enables consumers to access network communications 
services and distribute them within their residence or small business. 
The authorization conferred by this paragraph (c)(2) is limited to 
models of Huawei `personal consumer electronic devices' and `CPE' that 
were available to the public on or before May 16, 2019.
    (3) Cybersecurity research and vulnerability disclosure. BIS 
authorizes, subject to other provisions of the EAR, the disclosure to 
Huawei and/or to its listed non-U.S. affiliates of information 
regarding security vulnerabilities in items owned, possessed, or 
controlled by Huawei or any of its non-U.S. affiliates when related to 
the process of providing ongoing security research critical to 
maintaining the integrity and reliability of existing and currently 
`fully operational network' and equipment.
    (d) Certification statement. Prior to making an export, reexport, 
or transfer (in-country) pursuant to the temporary general license, the 
exporter, reexporter, or transferor must obtain a certification 
statement and any additional support documentation needed to 
substantiate the certification statement from the listed Huawei entity 
that will receive the item(s), as specified in paragraph (d)(1) of this 
supplement.
    (1) Certification statement required from Huawei or one of its 
listed non-U.S. affiliates. Prior to any export, reexport, or transfer 
(in-country) under the temporary general license to Huawei or any of 
its listed non-U.S. affiliates identified in paragraph (a) of this 
supplement, the exporter, reexporter, or transferor must obtain a 
certification statement from the entity that will receive the item(s). 
The temporary general license also requires the party exporting, 
reexporting, or transferring (in-country) an item ``subject to the 
EAR'' to obtain, from the listed Huawei entity receiving the item, a 
certification statement under paragraph (d) of this supplement 
specifying how the export, reexport, or in-country transfer satisfies 
the provisions of the temporary general license, including specifying 
whether the activity or activities that will be supported by the 
transaction fall within paragraph (c)(1), (2), or (3) of this 
supplement. In order to substantiate the certification statement for 
transactions that fall within paragraph (c)(1), the exporter, 
reexporter, or transferor must obtain documentation from Huawei or one 
of its listed non-U.S. affiliates showing that there was a legally 
binding contract or agreement executed between the listed Huawei entity 
and a `third party' on or before May 16, 2019. The exporter, 
reexporter, or transferor and the listed Huawei entity are each 
responsible for retaining the certification statement and any 
additional support documentation needed to substantiate the 
certification statement under paragraph (d). See part 762 of the EAR 
for record retention requirements. The certification statement must be 
in writing (which may be conveyed by email), be signed and dated by an 
individual of sufficient authority to legally bind the listed entity, 
and shall provide the information required in paragraphs (d)(1)(i) and 
(ii) of this supplement and the certifications specified in paragraphs 
(d)(1)(iii) through (v) of this supplement.
    (i) Name of the entity; complete physical address, to include 
shipping, corporate, and end user addresses, if different (simply 
listing a post office box is insufficient); telephone number; email 
address; website (if available); and name and title of individual 
signing the certification statement;
    (ii) A complete list of the item(s), including the applicable 
Export Control Classification Number(s) or designation (if EAR99) for 
the item(s) under the EAR, and (for tangible shipments of commodities 
and software) the quantity or quantities of the item(s) that will be 
exported, reexported, or transferred under the authority of the 
temporary general license (this inclusive list may cover multiple 
exports, reexports, or transfers (in-country) under the temporary 
general license of the same item(s); see paragraph (d)(2) of this 
supplement);
    (iii) The end-use of the item(s) to be received as an export, 
reexport, or transfer (in-country) falls within the scope of a 
specified authorizing paragraph under paragraph (c) of this supplement 
(a general statement or declaration that the item falls within the 
scope of paragraph (c) or the scope of the temporary general license 
will not be sufficient, as the specific authorizing paragraph under 
paragraph (c) must be identified);
    (iv) The entity will comply with the recordkeeping requirements in 
part 762 of the EAR, including by providing copies of the certification 
statement and all other export, reexport, or transfer (in-country) 
records required to be retained in part 762 to any authorized agent, 
official, or employee of BIS, the U.S. Customs Service, or any other 
agency of the U.S. Government as required in Sec.  762.7 of the EAR; 
and
    (v) The individual signing the certification statement, on behalf 
of the consignee identified in paragraph (a) of this supplement, has 
sufficient authority to legally bind the entity.
    (2) Certification statements may be used for multiple exports, 
reexports, and transfers (in-country). Exporters, reexporters, and 
transferors may rely on the certification statements obtained under 
paragraph (d)(1) of this supplement for multiple exports, reexports, 
and transfers (in-country) involving the same item(s) to the same 
consignee/end-user, provided the information included remains accurate 
for those additional exports, reexports, and transfers (in-country). If 
one certification statement is used for multiple exports, reexports, or 
transfers (in-country) made pursuant to the temporary general license, 
the exporter, reexporter, and transferor must maintain a log or other 
similar record that identifies each such export, reexport, and transfer 
(in-country) against that specific certification statement. The log or 
other similar record must be retained in accordance with part 762 of 
the EAR.

PART 762--[AMENDED]

0
3. The authority citation for part 762 is revised to read as follows:

    Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50 
U.S.C. 1701 et seq.; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 
783; Notice of August 8, 2018, 83 FR 39871 (August 13, 2018).

0
4. Section 762.2 is amended by revising paragraph (b)(55) to read as 
follows:


Sec.  762.2  Records to be retained.

* * * * *
    (b) * * *
    (55) Supplement No. 7 to part 744, Temporary General License 
Certification Statements and logs or other records required, including 
any additional support documentation needed to substantiate the 
certification statement, under paragraph (d) of Supplement 7 to part 
744 of this chapter.
* * * * *


[[Page 43493]]


    Dated: August 15, 2019.
Nazak Nikakhtar,
Assistant Secretary of Industry and Analysis, International Trade 
Administration, Performing the Non-Exclusive Duties of the Under 
Secretary of Industry and Security.
[FR Doc. 2019-17920 Filed 8-19-19; 8:45 am]
 BILLING CODE 3510-33-P