Once again, Congress punches back on Chinese company ZTE

Once again, Congress punches back on Chinese company ZTE

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ZTE promotional photo (ZTE via Yahoo)

WASHINGTON — The Senate is once again pushing back against President Donald Trump’s support for a Chinese telephone company that U.S. intelligence and military officials say is a major security risk.

On Monday night, the Senate overwhelmingly accepted an amendment to the fiscal 2019 National Defense Authorization Act to reinstate the ban on Chinese phone maker ZTE. The company is considered a national security threat over the possibility its technology could be used for cyber attacks or spying on behalf of the Chinese government, lawmakers said.

“By including this provision to undo the ZTE deal in the defense bill, the Senate is saying loudly and in a bipartisan fashion that the president is dead wrong to back off on ZTE,” Sen. Chuck Schumer (D-NY), the Democratic leader, said in a statement. “The fact that a bipartisan group of senators came together this quickly is a testament to how bad the Trump administration’s ZTE deal is and how we will not shy away from holding the president’s feet to the fire when it comes to keeping his promise to be tough on China.”

Last week Trump announced a deal to rescue ZTE and liberate the company from sanctions imposed by the Commerce Department in April for violating terms of its 2017 penalty agreement. The sanctions include a seven-year ban on the company from doing business with U.S. firms.

Trump made the deal despite strong bipartisan opposition.

The amendment to reinstate sanctions on ZTE was sponsored by Sens. Tom Cotton (R-Ark.) and Chris Van Hollen (D-Md.). It is now part of the $716 billion defense policy bill, considered must-pass legislation.

“I and obviously every other senator believes the death penalty is the appropriate punishment for their behavior,” Cotton told reporters,referring to ZTE. “They’re a repeat bad actor that should be put out of business.”

If the Senate amendment becomes law, it would automatically reinstate the seven-year prohibition until Trump has certified to Congress that ZTE has met certain conditions. It also would ban all U.S. government agencies from purchasing or leasing equipment and services from ZTE and a second Chinese telecommunications firm, Huawei Technologies, or any subsidiaries or affiliates or shell entities.

The amendment language “prohibits the federal government from doing business with ZTE or Huawei or other Chinese telecom companies” and “holds ZTE accountable for violating their previous commitment,” Cotton told reporters.

Among the steps taken by Congress to prevent any help to ZTE:

  • On May 24 the Senate Armed Services Committee approved its version of the 2019 defense bill and used the legislation to join and expand growing bipartisan efforts to push back against Trump’s desire to free ZTE from U.S. sanctions. An amendment to the bill prohibits dealings with any company that uses equipment from ZTE or Huawei Technologies.
  • On May 22, by a 23-2 vote, the Senate Banking Committee approved an amendment — with ZTE as the spur — as part of more sweeping legislation that gives regulators more punch to regulate foreign investment in the United States. The committee passed the full bill 25 to 0.
  • On March 17, in a unanimous, bipartisan vote, the House Appropriations Committee approved an amendment that will “prevent a foreign company that is beholden to its government — and that ignores embargoes — from infiltrating the devices and networks that are now indispensable to American life.”

In late April, the Pentagon ordered the removal of ZTE phones, along with mobile phones and other telecommunications equipment made by ZTE or Huawei Technologies, from military bases after senior U.S. intelligence officials warned the phones could be used to spy on service members and other Americans. Both companies have denied the allegations.

A 2012 report from Congress warned that the Chinese government could use the companies’ technology to conduct surveillance on the U.S.

“Huawei and ZTE devices may pose an unacceptable risk to department’s personnel, information and mission,” Pentagon spokesman Major Dave Eastburn said in a statement earlier this spring. “The department is evaluating the situation and will determine the necessity of issuing further guidance.”

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