US regulators are said to have blacklisted US telecom equipment maker Huawei Technologies to make some changes in the form of loopholes in a new rule aimed at curbing global chip sales.

The new rule, unveiled on Friday by the Commerce Department, expands the US authority to require a license to sell Huawei Of Semiconductors Made overseas with American technology, extending the department’s reach to the world’s No. 2 smartphone manufacturer to curb exports.

But the rule only includes chips designed by Huawei and does not cover shipments if they are sent directly to Huawei’s customers. Some industry advocates see this as an important flaw.

When asked Wednesday about the ability to adjust the rule to close that gap, State Department official Christopher Ashley Ford said the rule itself would provide insights to determine if it should be changed.

The rules “will give us a lot of information, on the basis of which export control decisions can be grounded as we go forward and if we need to, if we try to work around our rules, we can change the rules.” Try to find the right answer to these challenges, including change. ” Somehow, “Ford said.

He said the regulators watch and “certainly make any changes that we think are necessary.”

Huawei declined to comment.

The company was added to the “unit list” of commerce last year due to national security concerns, amid allegations it violated US sanctions on Iran, stole intellectual policy and could spy on customers, accusations Huawei denied is.

Disappointment in China extends to the administration that supply listings are not doing enough to cut Huawei’s supply, which prompted an unsuccessful effort, first reported by Reuters in November, which ended in Friday’s rule .

An industry lawyer, who declined to be named, said one way to change the rule would be to change the language to capture chips sold for the benefit of “Huawei”, but as such The change revealed its challenges.

Speaking as part of the same briefing with Ford, a Commerce Department official, Cordell Hull, said the agency’s enforcement arm would be “looking at efforts to circumvent the rules.”

© Thomson Reuters 2020