A group of 14 Republican politicians in the US House of Representatives on Friday asked the US Commerce Department to add former Huawei unit Honor Device Co to the government’s economic blacklist. The politicians led by Republican Michael McCaul, the ranking member of the House Foreign Affairs Committee, noted in a letter that Honor was divested from Huawei Technologies Co, which was added to the US Entity List in May 2019. Being added to that list bans companies from buying parts and components from US companies or using American technology without US government approval. The Republican politicians argued that Honor was spun off “in an effort to evade US export control policies meant to keep US technology and software out of the hands of the Chinese Communist Party (CCP)”. The letter cited analysts saying that “selling Honor gave it access to the semiconductor chips and software it relied on and would have presumably been blocked had the divestiture not gone through”. A US Commerce Department spokesman said the agency appreciates “the perspective of these members of Congress”. He noted the department “is continually reviewing available information to identify potential additions to the Entity List”. The Chinese embassy in Washington, Honor and Huawei did not immediately respond to requests for comment. Huawei in November 2020 said it was selling its budget brand smartphone unit, Honor, to a consortium of more than 30 agents and dealers. Reuters reported in January the all-cash sale fetched more than 100 billion yuan (US$15.5 billion) and was aimed at keeping the budget brand alive, “as sanctions slapped on Huawei by the United States had hampered the unit’s supply chain and cut off the company’s access to key hardware like chips and software”. Huawei posts worst interim sales slump in decades as smartphone, telecoms gear businesses shrink amid US sanctions Washington says Huawei is a national security threat, which Huawei has repeatedly denied. In January, Honor said it had formed partnerships with chip makers such as Intel Corp and Qualcomm Inc and launched a new phone. The politicians said “the same concerns about technology exports to Honor when it was part of Huawei should apply under its current state-backed ownership structure”.
CNY - Chinese Yuan Renminbi