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House Republicans Demand Full Huawei Sanctions After Chip Breakthrough

(Bloomberg) -- Republican lawmakers are pressing the Biden administration to completely cut off Huawei Technologies Co. and Semiconductor Manufacturing International Corp. from their American suppliers after Huawei launched a new phone using highly advanced technology the US has been trying to keep out of China’s hands.

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The phone, which uses a made-in-China 7-nanometer chip that appears to rely on US technology, has stoked debate in Washington over the effectiveness of US attempts to curtail China’s technological and military prowess.

Huawei and SMIC, the Chinese company that produced the chip, are both already subject to partial US sanctions — and are among the primary targets of an export control regime the Biden administration has imposed over the last year. The GOP lawmakers want to escalate restrictions on the companies to full sanctions.

Huawei’s advanced phone shows existing restrictions aren’t effective, a group of 10 Republican representatives led by House Foreign Affairs Chairman Michael McCaul wrote in a Thursday letter to Alan Estevez, the undersecretary for industry and security at the Commerce Department. The group, which also includes the leaders of the Energy and Commerce, Armed Services and China Select Committees, requested a briefing from Commerce’s Bureau of Industry and Security as well as the Departments of Defense, State and Energy by Sept. 28.

Read More: US Probes Made-in-China Chip as Tensions Flare Over Technology

“Due to the ubiquity of US origin technology throughout the semiconductor supply chain, these reports suggest a violation of US export control regulations,” the lawmakers wrote. “We are extremely troubled and perplexed about the Bureau of Industry and Security’s (BIS) inability to effectively write and enforce export control rules against violators, especially China.”

The Commerce Department has stayed silent on whether SMIC is violating US sanctions as they investigate the new chip. The department didn’t immediately respond to a request for comment.

Huawei and SMIC are already blacklisted by the US, meaning that American suppliers and others need to obtain special trade licenses to ship to both firms. The companies also are among the targets of export controls announced last year that aim to block China’s semiconductor production from advancing beyond a 14-nanometer chip that’s about eight years behind the most cutting-edge technology.

The Biden administration has been weighing changes to its Huawei licensing policy for months, and has long been under pressure from Republican lawmakers to deny any new licenses to the firm. Now, lawmakers are seizing on the new Huawei phone as more evidence that the US needs to ratchet up its regime.

Read More: Biden Team Weighs Fully Cutting Off Huawei From US Suppliers

Specifically, the letter calls for complete blocking sanctions against SMIC and Huawei and a ban on US imports of SMIC-produced chips. The lawmakers also say Commerce should place SMIC, Huawei and all of their subsidiaries on a so-called entity list, subjecting them to trade restrictions, as well as revoke all existing licenses and deny new licenses, and pursue criminal charges against executives at both firms.

--With assistance from Jenny Leonard.

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