Commerce Clears Way for U.S. Companies to More Fully Engage in Tech Standards-Development Bodies

U.S. Secretary of Commerce Wilbur Ross announced a new rule Monday ensuring U.S. industry’s ability to more fully contribute to standards-development activities in the telecommunications sector. International standards serve as the critical building blocks for technological development by enabling functionality, interoperability, and safety. U.S. participation and leadership in standard-setting influences the future of 5G, autonomous vehicles, artificial intelligence, and other cutting-edge technologies.

“The United States will not cede leadership in global innovation. This action recognizes the importance of harnessing American ingenuity to advance and protect our economic and national security,” said U.S. Department of Commerce Secretary Wilbur Ross. “The Department is committed to protecting U.S. national security and foreign policy interests by encouraging U.S. industry to fully engage and advocate for U.S. technologies to become international standards.”

This action is meant to ensure Huawei’s placement on the Entity List in May 2019 does not prevent American companies from contributing to important standards-developing activities despite Huawei’s pervasive participation in standards-development organizations.

Under the new Bureau of Industry and Security (BIS) rule, technology that would not have required a license to be disclosed to Huawei before the company’s placement on the Entity List can be disclosed for the purpose of standards development in a standards-development body without need for an export license. In amending the Huawei Entity Listing, the rule promotes U.S. national security and foreign policy interests by facilitating U.S. leadership in standards-development bodies.

The general advisory opinion posted by BIS on August 19, 2019, is no longer in effect. The Department will continue to engage with stakeholders and take the actions necessary in the interest of U.S. national security and foreign policy.

Background:

• In 2019, BIS added Huawei Technologies Co., Ltd and its foreign affiliates (collectively, “Huawei”) to the Entity List under the Export Administration Regulations (EAR) because Huawei posed a significant risk of involvement in activities contrary to the national security or foreign policy interests of the United States.
• Sent to the Federal Register on Friday, June 12, the action authorizes the release of U.S. technology designated as EAR99 or controlled only for Anti-Terrorism reasons on the Commerce Control List without a license, in the context of “voluntary consensus standards bodies” of which Huawei is a participant, for the purpose of contributing to the revision or development of a “standard,” as defined in Office of Management and Budget Circular A-119 (Rev. 2016).

The rule returns U.S. industry to the status quo ante, from an Entity List perspective, with respect to disclosures of such technology to Huawei and its affiliates in legitimate standards development contexts only, and not for commercial purposes. Disclosures for commercial purposes remain “subject to the EAR” and are still subject to recordkeeping and all other applicable EAR requirements.