Part B of Section 889 takes effect August 13, 2020. The ban prohibits the federal government from contracting with any “entity that uses” telecommunications and video surveillance products or services from Huawei Technologies Company Ltd. (Huawei) and four other Chinese entities, including their affiliates and subsidiaries (we’ve previously covered Section 889 here and here). This post examines recent industry feedback during a public meeting with the Department of Defense (“DoD”) and provides five compliance recommendations pending forthcoming rulemaking.
On March 2, 2020, DoD held a public meeting on Part B. Several trade associations gave feedback, and raised five major concerns: 1) the broad scope of the rule; 2) the inability of many contractors to meet the August 2020 compliance deadline; 3) whether the rule will apply outside the United States; 4) whether the term “use” would include a reseller’s commercial sales of prohibited products, thus precluding a supplier from contracting with the federal government; and 5) whether the “entity” subject to the ban includes only the legal entity executing the contract with the federal government, or also its affiliates and subsidiaries. Unfortunately, DoD did not indicate when an interim rule might issue.