Bipartisan Bill Could Ban U.S. Tech Exports to Some Chinese Telecoms

Members of the House and Senate announced introduction of the Telecommunications Denial Order Enforcement Act today, which would require the Trump administration to issue export denial orders for Chinese telecommunications companies caught breaking export control laws and sanctions.

The bill, which specifically names China-based Huawei and ZTE as covered entities, would require the White House to report to Congress on Chinese companies that are in violation of sanctions or export controls, and to impose strict restrictions banning violators from participating “in any way in any transaction involving any commodity, software or technology exported or to be exported from the United States that is subject to the Export Administration Regulations.”

The bill also would ensure that penalties are not removed until violators have shown a pattern of compliance for at least one year, and would prohibit Executive branch officials, except for the President, from altering sanctions.

The proposed restrictions are similar to export restrictions already placed on ZTE, but the bill would expand the scope of the policy to all Chinese telecommunications companies.

The bipartisan bill was introduced by Reps. Mike Gallagher, R-Wis., and Ruben Gallego, D-Ariz., in the House, and Sens. Tom Cotton, R-Ariz., and Chris Van Hollen, D-Md., in the Senate.

“This bipartisan legislation sets a simple standard: if a Chinese telecommunications firm is found to have violated U.S. sanctions moving forward, it will be subject to the same severe punishment originally imposed on ZTE,” said Gallagher.

The bill’s sponsors mentioned the arrest in Canada last month of Huawei executive Meng Wanzhou for allegedly violating U.S. sanctions, and names Huawei as a major motivating factor for the bill. She remains under arrest in Canada and it’s unclear whether the Huawei executive, who is the daughter of the company’s founder, will be extradited to the U.S.

“Huawei and ZTE are two sides of the same coin. Both companies have repeatedly violated U.S. laws, represent a significant risk to American national security interests, and need to be held accountable. Moving forward, we must combat China’s theft of advanced U.S. technology and their brazen violation of U.S. law,” said Van Hollen.

“If Chinese telecom firms like Huawei violate our sanctions or export control laws, they should receive nothing less than the death penalty–which this denial order would provide,” said Cotton.

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