This is the first official statement that attempts to interpret the comments made by US President Donald Trump at the G-20 Summit in June, regarding the ban on Huawei.
In a speech on Tuesday, Commerce Secretary Wilbur Ross said this was being done to implement what Trump had said during the G-20 summit in Japan at the end of June.
During the summit, Trump made an off-hand comment after he met Chinese President Xi Jinping, saying: "US companies can sell their equipment to Huawei. We’re talking about equipment where there’s no great national security problem with it.”
"Within those confines we will try to make sure that we don’t just transfer revenue from the US to foreign firms. Huawei itself remains on the Entity List, and the announcement does not change the scope of items requiring licences from the Commerce Department, nor the presumption of denial."
Huawei was placed on the Entity List on 16 May. Five days later, the US Commerce Department said the ban would be eased for 90 days, so that existing networks and handsets which had already been sold by the Chinese firm would continue to receive software updates.
US companies, a number of processor manufacturers among them, have got around the ban by selling Huawei goods made by their branches in other countries.
Trump has hinted on more than one occasion that Huawei could be used as a bargaining chip to settle the ongoing US-China trade war.