Addition of Certain Entities to the Entity List; Correction

AGENCY:

Bureau of Industry and Security, Commerce.

ACTION:

Correcting amendments.

SUMMARY:

The Bureau of Industry and Security (BIS) publishes these amendments to correct three errors contained in the revisions to the Entity List that were published in a final rule on February 14, 2022. That final rule amended the Export Administration Regulations (EAR) by revising the Entity List entry for “Huawei Cloud Brazil” (under Brazil) and by adding a new entry for “Huawei Technologies Co., Ltd.” (under China, People's Republic of). However, the references to the foreign direct product provisions in the EAR that apply to these two entities were incorrect. This rule amends the entries for the two entities to include the correct references to these EAR provisions and also corrects a typographical error in one of these entries.

DATES:

This rule is effective April 11, 2022. This rule is applicable as of February 14, 2022.

FOR FURTHER INFORMATION CONTACT:

Chair, End-User Review Committee, Office of the Assistant Secretary for Export Administration, Bureau of Industry and Security, Department of Commerce, Phone: 202-482-5991; Email: ERC@bis.doc.gov.

SUPPLEMENTARY INFORMATION:

The Entity List in supplement no. 4 to part 744 of the Export Administration Regulations (EAR) (15 CFR parts 730-774) identifies entities for which there is reasonable cause to believe, based on specific and articulable facts, that the entities have been involved, are involved, or pose a significant risk of being or becoming involved in activities contrary to the national security or foreign policy interests of the United States. The EAR impose additional license requirements on, and limit the availability of most license exceptions for, exports, reexports and transfers (in-country) to listed entities. These additional license requirements are referenced, together with other relevant EAR provisions, in the “License requirement” column for each entity. The license review policy for each listed entity is identified in the “License review policy” column for that entity on the Entity List, and the impact on the availability of license exceptions is described in the relevant Federal Register document adding the entities to the Entity List. BIS places entities on the Entity List pursuant to part 744 (Control Policy: End-User and End-Use Based) and part 746 (Embargoes and Other Special Controls) of the EAR.

The End-User Review Committee (ERC), composed of representatives of the Departments of Commerce (Chair), State, Defense, Energy and, where appropriate, the Treasury, makes all decisions regarding additions to, removals from, or other modifications to the Entity List. The ERC makes all decisions to add an entry to the Entity List by majority vote and makes all decisions to remove or modify an entry by unanimous vote.

On February 14, 2022 (87 FR 8180), BIS published a final rule titled “Addition of Certain Entities to the Entity List,” which amended the Entity List by, inter alia, revising the entry for “Huawei Cloud Brazil” (under Brazil) and adding a new entry for “Huawei Technologies Co., Ltd.” (under China, People's Republic of). However, the references to certain EAR foreign direct product provisions that were identified in the “License requirement” column for each of these entities were incorrect. Specifically, the “License requirement” column for each of these entries incorrectly referenced § 736.2(b)(3)(vi) of the EAR, instead of § 734.9(e) of the EAR.

The references to § 734.9(e) of the EAR were added to a number of entities on the Entity List, replacing previous references to § 736.2(b)(3)(vi) of the EAR, by a final rule that BIS published in the Federal Register on February 3, 2022 (87 FR 6022). That final rule consolidated the foreign direct product (FDP) provisions in § 734.9 of the EAR. Prior to the publication of the February 3, 2022, final rule (hereinafter, the “FDP rule”), the FDP provisions of the EAR were found in § 736.2(b)(3) (General Prohibition 3) and footnote 1 to supplement no. 4 to part 744 (the Entity List). The FDP rule relocated the license requirement, license review policy, and license exception applicability provisions for certain listed entities from the Entity List's footnote 1 to § 744.11(a) of the EAR, where the overall license requirements pertaining to listed entities are located. In addition, the FDP rule moved the description of the product scope and end-user scope of the Entity List FDP requirements from the aforementioned footnote 1 to § 734.9 of the EAR, where the FDP provisions are now consolidated. However, the scope of the global amendatory instruction that made conforming changes to the Entity List table in supplement no. 4 to part 744 did not include the entry for “Huawei Cloud Brazil” (under Brazil). As a result, the reference to § 736.2(b)(3), in the “License requirement” column for this entity was not removed and replaced with a reference to § 734.9(e) as should have been the case.

Although the February 14, 2022, Entity List rule included a revision of the entry for “Huawei Cloud Brazil” (under Brazil), the rule inadvertently failed to change the reference in the “License requirement” column for this entity from § 736.2(b)(3) to § 734.9(e). Furthermore, the addition of a new entry for “Huawei Technologies Co., Ltd.” (under China, People's Republic of) to the Entity List, also incorrectly referenced § 736.2(b)(3), instead of § 734.9(e), in the “License requirement” column for the entity.

These correcting amendments revise the “License requirement” column in each of the aforementioned Entity List entries to correctly reference § 734.9(e), instead of § 736.2(b)(3). These amendments also correct a typographical error, in the “License requirement” column for “Huawei Technologies Co., Ltd.” (under China, People's Republic of), by revising the phrase “except for” to read “EXCEPT² for”, consistent with the application of Entity List footnote 2 to this entity ( i.e., with respect to the provision of ongoing security research critical to maintaining the integrity and reliability of an existing and currently fully operational `third party' network and equipment providing services to the `third party's' customers—in this instance, the term `third party' refers 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).

List of Subjects in 15 CFR Part 744

• Exports
• Reporting and recordkeeping requirements
• Terrorism

For the reasons stated in the preamble, part 744 of the Export Administration Regulations (15 CFR parts 730-774) is corrected by making the following correcting amendments:

PART 744—[AMENDED]

1. The authority citation for 15 CFR part 744 continues 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. 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 September 15, 2021, 86 FR 52069 (September 17, 2021); Notice of November 10, 2021, 86 FR 62891 (November 12, 2021).

2. Supplement no. 4 to part 744 is amended:

a. Under BRAZIL by revising the entry for “Huawei Cloud Brazil”; and

b. Under CHINA, PEOPLE'S REPUBLIC OF by revising the entry for “Huawei Technologies Co., Ltd.”.

The revisions read as follows:

Supplement No. 4 to Part 744—Entity List