Huawei given 90-day stay-of-execution to continue operating in the US
US companies can continue doing business with Huawei until 19th August
The US government has relaxed its ban on Huawei by granting it a new 90-day licence to operate in the US.
The latest move temporarily reverses the blacklisting of the Chinese company, which was announced last week and barred it from purchasing technology or products from US companies.
The new Temporary General License issued by the government provides Huawei with three more months to obtain US technology for maintaining and repairing existing networks/products and to provide US-sourced software updates to its existing devices.
US companies can continue business with Huawei as normal until 19th August, this year.
Despite the concession, Huawei will remain banned from obtaining US technology to make new products without permits issued by the government.
If there is no further extension, however, US companies will have to discontinue doing business with Huawei and its affiliates after 90 days.
In a statement, US Secretary of Commerce Wilbur Ross said that the new move is intended to provide telecoms operators relying on Huawei equipment time to make alternative arrangements.
"In short, this licence will allow operations to continue for existing Huawei mobile phone users and rural broadband networks," Ross added.
Kevin Wolf, former official from Department of Commerce, told Reuters that the goal of the entire exercise seems "to prevent internet, computer, and cellphone systems from crashing".
He added: "This is not a capitulation. This is housekeeping."
The US government's decision brought some calm to world markets, which had slumped on Monday following Google's decision over the weekend to suspend support for Huawei.
The latest move is also expected to deter China from taking immediate retaliatory action against US companies operating in China.
However, Huawei founder Ren Zhengfei said that the granting of a temporary licence bears little meaning for Huawei as the company had already prepared for such sanctions.
Ren also said that the US government's decision to put Huawei on its "Entity List", requiring US companies to acquire a licence before supplying it, underestimates Huawei's capabilities.
On Friday last week, the US Commerce Department placed Huawei and 70 affiliates on its Entity List. This was followed by the news that several companies, including some key suppliers, were discontinuing sales to Huawei with immediate effect.
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