Founded in 1987, Huawei is a leading global provider of information and communications

part 744.11(b) of the United States Export 
Administration Regulations (EAR), the Bureau 
of Industry and Security (BIS) of the United 
States added Huawei Technologies Co., Ltd. 
and certain non-US affiliates (the Entities) to 
the Entity List. Upon the Entities being added 
to the Entity List, export, re-export or  
in-country transfer of items subject to the EAR 
(including hardware, software, technology, etc.) 
to the Entities shall be subject to a BIS license 
requirement.

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2020 Annual Report
 
       
103
On May 15, 2020, the BIS amended the 
foreign-produced direct product rule (the 
Rule) by bringing certain foreign-produced 
items subject to the EAR and applied this new 
control to the Entities. On August 17, 2020, in 
addition to adding another 38 Huawei non-US 
affiliates to the Entity List, the BIS revised the 
Rule again by expanding the scope of  
foreign-produced items subject to the EAR 
so as to further restrict access by the Entities 
to items produced from U.S. technology or 
software (collectively referred to as the Events).
As a result, supplies of relevant items to the 
Group and sales of certain products of the 
Group are adversely affected. The Group 
has been taking active measures to mitigate 
the impact of the Events. In preparing these 
financial statements, management has 
applied significant judgments to estimate 
the impacts arising from the Events and 
relevant impairments and provisions have 
been recognised appropriately. The Group 
continuously assesses these impacts and makes 
adjustment to relevant estimates based on the 
development of the Events.