According to foreign media reports, two US officials said on Wednesday local time that US regulators are willing to make changes to close so-called "loopholes" in the new rules banning the sale of chips to Huawei. The U.S. Department of Commerce previously announced new export control regulations to restrict Huawei's ability to use chip design and manufacturing that includes U.S. technology and software.

 

 

The regulation also expands the US's authority to require a licence for sales to Huawei to use US technology to produce semiconductors abroad.

 

However, this provision only covers chips designed by Huawei and does not cover chips shipped directly to Huawei's customers who can install the chipsets into Huawei systems, which does not constitute a supply to Huawei. Many industry lawyers see this as a major loophole. Two US officials recently said that US regulators are willing to make changes to "close the loophole" on this point.

 

Asked whether US regulators might adjust the rule, State Department official Christopher Ashley Ford said it would require insight from regulators to determine whether the rule should be changed.

 

Ford said the rule would "provide us with more information on which to base our future export control decisions and try to find the right answers to these challenges, including adjustments, if necessary, if Huawei tries to get around our rules in some way."

 

He added that the regulator would be watching closely and "will certainly make any changes we deem necessary". Huawei declined to comment.

 

Huawei was placed on the US Department of Commerce's "Entity List" last year for national security reasons. The US has accused Huawei of violating several of its laws, allegations which the latter denies. Those in the US government who are tough on Huawei are frustrated, arguing that the "Entity List" does not go far enough in cutting off Huawei's supplies and that tougher measures are needed.

 

One way to change the rules would be to adjust the wording, but such a change would create challenges for the regulator itself, according to an industry lawyer who asked not to be named. CorDELL Hull, an official at the US Department of Commerce, said the agency's enforcement division "will look at circumvention of the rules".