Bipartisan Bill introduced to ban sale of US tech to Huawei and ZTE

US lawmakers introduce bipartisan Bill that, if passed, would ban the export of US chips and other components to the two Chinese tech companies.

A bipartisan group of US lawmakers introduced a Bill on Wednesday that, if passed, would ban the sale of tech to Chinese companies such as Huawei and ZTE.

The Bill, which was introduced by Republicans Senator Tom Cotton and Representative Mike Gallagher alongside Democrats Senator Chris Van Hollen and Representative Ruben Gallego, seeks to enforce denial orders on "covered telecommunications companies" that are found to have violated US export control or sanction laws.

Huawei and ZTE, who are both specifically addressed as "covered telecommunication companies", have been mired in suspicion in recent years for allegedly using tech to spy on the US.

Other measures included in the bipartisan Bill includes: Imposing the same strict penalties originally faced by ZTE on any Chinese company that is found to be in violation of US export control laws or sanctions; ensuring that penalties for violating US export control laws or sanctions are not withdrawn until there is a demonstrated pattern of compliance and cooperation over the course of a year; and disallowing any executive agency official from modifying any penalty imposed on Chinese telecommunications companies unless the President certifies that the company has not violated US laws for one year and is cooperating fully with US investigations.

ZTE was previously banned from buying US components after the company was found to have breached a US trade embargo with Iran. The ban was lifted in July, after ZTE agreed to pay a tranche of a $1.4 billion penalty.
 
Meanwhile, Huawei chief financial officer Meng Wanzhou is in Vancouver on bail, following her December 1 arrest, and faces possible extradition to the United States for allegedly misleading multinational banks about Iran-linked transactions, putting the banks at risk of violating US sanctions.
 
US prosecutors are also pursuing a criminal investigation into Huawei for reportedly stealing trade secrets and misappropriating technology from its US partners, according to The Wall Street Journal.
 
"Huawei and ZTE are two sides of the same coin. Both companies have repeatedly violated US laws, represent a significant risk to American national security interests, and need to be held accountable," said Senator Chris Van Hollen following the Bill's introduction.

"Huawei is effectively an intelligence-gathering arm of the Chinese Communist Party whose founder and CEO was an engineer for the People's Liberation Army. It's imperative we take decisive action to protect US interests and enforce our laws," Senator Tom Cotton added.

Huawei founder Ren Zhengfei, formerly a Chinese military engineer during the Cultural Revolution, addressed questions surrounding his involvement with the Communist Party during a media conference earlier this week. 

"I joined the military during China's Cultural Revolution. At that time, there was chaos almost everywhere … the central government hoped that every Chinese person could get at least one decent piece of clothing every year, so they decided to introduce the most advanced equipment from a French company," Ren said. "It was a very advanced set of equipment from the French company … I had been to college, and people like me could play a role in that project."

Ren also reiterated that his company never received a request from government to spy, and added that the company will always prioritise its customer's privacy. 

"Huawei is an independent business organisation. When it comes to cybersecurity and privacy protection, we are committed to siding with our customers … neither Huawei, nor I personally, have ever received any requests from any government to provide improper information," he said.

The introduction of this bipartisan Bill is another attempt by the US to cease all transactions with Huawei and ZTE, with United States President Donald Trump in December considering an executive order to bar US companies from using telecommunications equipment made by the two Chinese companies.
 
There has also been growing sentiment among western countries to avoid the two Chinese tech companies, with Huawei's 5G equipment being banned or limited by the US, Australia, and New Zealand, while the UK's BT said it will be stripping Huawei from EE's mobile core.
 
According to Reuters, the German government also announced on Thursday that it is considering ways to exclude Huawei form its 5G auction.
 
Over the weekend, Poland's Internal Affairs Minister Joachim Brudzinski floated the idea of a Huawei ban across NATO or the EU in the wake of the arrest of a former Huawei employee and former Polish security official over spying allegations.

Taken together, these moves underscore the global intelligence community's concerns about China and its largest companies.  
 
US and Chinese officials are also working on arrangements for higher-level trade talks after mid-level officials last week discussed US demands for China to address issues such as intellectual property theft, forced technology transfers, and other non-tariff barriers.

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