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ECONOMY

Japanese group puts Huawei on trade control alert list

  • June 6, 2019
  • , Nikkei Asian Review , 2:54 a.m.
  • English Press

 

TOKYO — A Japanese organization has added Huawei Technologies to a database that lists groups of potential concern to exporters, a move that could make corporate Japan even more reluctant to deal with the Chinese telecom manufacturer, Nikkei learned Wednesday.

 

Huawei was listed on the Chaser service run by the Center for Information on Security Trade Control, or Cistec, as of May 16. Chaser lists companies and organizations that are subject to sanctions from Japan, the U.S., the European Union, the United Nations and others, or that are suspected of contributing to the development of weapons of mass destruction.

 

The inclusion of Huawei was likely automatic, reflecting the company’s addition last month to the U.S. Commerce Department’s Entity List, which essentially bars American businesses from exporting to it. Cistec, a nonprofit group, said it cannot comment on circumstances surrounding individual companies.

 

Inclusion in the Chaser database has no legally binding effect, but many Japanese enterprises involved in exporting products such as chips, electronic components or machine tools refer to it in order to avoid potential pitfalls. Companies might voluntarily scale back business with Huawei or otherwise be more cautious in their dealings with the Chinese giant.

 

U.S. export control legislation has a wide reach, covering even products exported by other countries if they include more than 25% American content. Exporters also fear being held responsible if products they ship are put to unintended applications.

 

“It may become necessary to more rigorously verify” how exports are used, said a source in the machinery industry.

 

“Small and midsize companies that deal with Huawei and can’t confirm on their own how [their products] are used may be inclined to refrain from doing business with it,” a trade expert said.

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