US Department of Commerce clears Huawei to participate in international standards organizations

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International Trade Alert

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On June 18, 2020, the US Department of Commerce, Bureau of Industry and Security (BIS) published a revision to the Export Administration Regulations (EAR), changing the Huawei Entity List entries to permit the transfer of technology subject to the EAR, without a license, that is designated as EAR99, or controlled on the Commerce Control List for anti-terrorism reasons only, when released to members of a "standards organization" for the purpose of contributing to the revision or development of a "standard."

"Standard" and "standards organization" are defined as set out below.

Standard. This term is equivalent to "standard" or "technical standard" as defined in Office of Management and Budget Circular A-119 (Rev. 2016) (81 FR 4673 (Jan. 27, 2016)), "Federal Participation in the Development and Use of Voluntary Consensus Standards and in Conformity Assessment Activities" section 2.a, available here.

Section 2.a of Office of Management and Budget (OMB) Circular A-119 reads as follows:

a. The term "standard," or "technical standard," (hereinafter "standard") as cited in the NTTAA, includes all of the following: 

(i) common and repeated use of rules, conditions, guidelines or characteristics for products or related processes and production methods, and related management systems practices;
(ii) the definition of terms; classification of components; delineation of procedures; specification of dimensions, materials, performance, designs, or operations; measurement of quality and quantity in describing materials, processes, products, systems, services, or practices; test methods and sampling procedures; formats for information and communication exchange; or descriptions of fit and measurements of size or strength; and
(iii) terminology, symbols, packaging, marking or labeling requirements as they apply to a product, process, or production method. 

Standards organization. This term is equivalent to "voluntary consensus standards body," as defined in Office of Management and Budget Circular A-119 (Rev. 2016) (81 FR 4673 (Jan. 27, 2016)), “Federal Participation in the Development and Use of Voluntary Consensus Standards and in Conformity Assessment Activities" section 2.e, available here.  

Section 2.e of OMB Circular A-119 reads as follows:

e. "Voluntary consensus standards body" is a type of association, organization, or technical society that plans, develops, establishes, or coordinates voluntary consensus standards using a voluntary consensus standards development process that includes the following attributes or elements:

(i) Openness: The procedures or processes used are open to interested parties. Such parties are provided meaningful opportunities to participate in standards development on a non-discriminatory basis. The procedures or processes for participating in standards development and for developing the standard are transparent.
(ii) Balance: The standards development process should be balanced. Specifically, there should be meaningful involvement from a broad range of parties, with no single interest dominating the decision-making.
(iii) Due process: Due process shall include documented and publically available policies and procedures, adequate notice of meetings and standards development, sufficient time to review drafts and prepare views and objections, access to views and objections of other participants, and a fair and impartial process for resolving conflicting views.
(iv) Appeals process: An appeals process shall be available for the impartial handling of procedural appeals.
(v) Consensus: Consensus is defined as general agreement, but not necessarily unanimity. During the development of consensus, comments and objections are considered using fair, impartial, open, and transparent processes. 

In making this change to the strict export control on Huawei participation in international standards organizations, BIS noted that international standards serve as the building blocks for product development and help ensure product functionality, interoperability, and safety; it is important to US technological leadership that US companies be able to work in these bodies in order to ensure that US standards proposals are fully considered.  

In practice, this change to the Huawei licensing requirements as imposed by its inclusion on the BIS Entity List will solve the problem that other participants in these standards organizations have had with Huawei participating in these organizations.

Learn more about the implications of this change by contacting the author.