Why startups need to be careful about export licenses and the Huawei ban

America is the land of free trade … precisely until it is not. Through a thicket of laws and regulations, the U.S. government has broad control over what can get exported to whom, particularly in areas with sensitive technology or national security concerns. In general, those restrictions are loose, which is why startups mostly haven’t had to think about export laws.

That open world is rapidly closing though, and startups could well be the most harmed given that they have limited resources to handle these sorts of bureaucratic processes and the potential large penalty fines.

Last week, President Trump signed an executive order requiring that the Department of Commerce initiate a review of regulations and enforcement practices to ensure that U.S. entities (people and companies) don’t provide “information and communications technology or services” to a “foreign adversary.” That term was read as describing China, although nothing in the order prevents its expansion to cover other countries in the future.