Sen. Rick Scott (R-Fla.) on Friday introduced legislation to limit a loophole allowing American tech companies to sell products to Huawei...
Sen. Rick Scott (R-Fla.) on Friday introduced legislation to limit a loophole allowing American tech companies to sell products to Huawei despite Department of Commerce restrictions.
The agency placed Huawei on the “entity list” in May, preventing U.S. firms from conducting business with the company unless they obtain a specific license, citing national security concerns with the Chinese telecommunications giant.
Although Huawei has been granted multiple temporary licenses to delay that designation — most recently on Thursday for another 45 days — companies have already begun finding ways to continue selling equipment to Huawei without running afoul of Commerce Department penalties.
One way to do that is a loophole that allows companies to sell products made outside of the U.S. to Huawei without a license, as long as the products contain less than 25 percent U.S.-made content subject to export restrictions.
The bill introduced by Scott on Friday would lower that threshold to 10 percent when companies do business with Huawei.
“We know Huawei is supported and controlled by the communist regime in Beijing, which continues to violate human rights and steal our data, technology, and intellectual property,” the Florida lawmaker said in a statement.
“Companies in the United States should not be allowed to sell to Huawei, and my legislation will further restrict their ability. I look forward to all of my colleagues and the Administration joining in support of my proposal to crack down on U.S. exports to Huawei, protect our national security and the security and growth of the U.S. technology industry.”
Scott’s legislation mirrors a proposal the Department of Commerce reportedly circulated around federal agencies last month.
The proposal was reportedly withdrawn after pushback from the Pentagon, which expressed concern about the effect the regulation could have on American businesses.