US Senators make final push to ban ZTE with NDAA amendment

Six US Senators urged the House and Senate Armed Services Committee to reintroduce the ZTE penalties and strengthen protections against IP theft and espionage by Chinese telecom companies in the 2019 NDAA bill

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(By Associated Press)

TAIPEI (Taiwan News) – As the U.S. Senate prepares to vote on what will likely be the final version of the 2019 National Defense Authorization Act (NDAA), some senators are making a final push for the original ban and penalties targeting Chinese telecom company ZTE to be reintroduced via an addition to the legislation.

A group of six lawmakers sent a letter on July 12 to the Senate and House Armed Services Committee which is preparing the NDAA FY2019 Conference Report before a final vote to confirm the annual defense plan and spending bill. The letter asks that the committee recognize the serious risk posed by China in terms of intelligence and IP theft, and to include an amendment that would reinstate the original penalties on ZTE.

Led by Senator Marco Rubio, the letter strongly urges the committee to include the “Cotton-Van Hollen-Schumer-Rubio Amendment” in the final version of the NDAA bill, which would undo the lenient and forgiving deal the Trump made with China to protect the telecom giant, reportedly as a direct favor to Xi Jinping.

The letter notes the serious threat that the operations of Chinese telecom companies, and their agents represent to the national security of the U.S.A. The letter notes that:

“Our nation’s six top intelligence leaders testified before the Senate Intelligence Committee in February 2018 about their concern that ZTE, Huawei, and other Chinese state-directed telecommunications companies are beholden to the Chinese government and Communist Party, which provides the capacity for espionage and intellectual property theft, and therefore poses clear threats to the national security, people, and economy of the United States.”

The Senators strongly oppose Trump’s decision, carried out by the Commerce Department’s Bureau of Industry and Security (BIS) to lift the seven year ban that had been imposed on ZTE for their violations of Iran sanctions.

ZTE was recently allowed to resume some sales in the U.S. earlier this month, after paying a fine, replacing their entire executive board, and hiring a U.S. affiliated monitor for business operations moving forward.

The senators not only requests that the penalties be reinstated, but that the U.S. henceforth prohibit all government and military personnel from “using or procuring equipment from, or entering into contracts with ZTE or Huawei,” because of the potential espionage threat which the companies pose.

The letter also calls for the implementation of a Foreign Investment Risk Review Modernization Act (FIRRMA) to strengthen protocol to protect against IP theft, which China is actively engaged in, as evidenced by the recent saga involving U.S. firm Micron whose patented technology was stolen by a Taiwanese company UMC in league with Chinese chip manufacturers and the Chinese government.

When announcing the original amendment to the NDAA targeting ZTE Senator Chuck Schumer said “Both parties in Congress must come together to bring the hammer down on these companies rather than offer them a second chance, and this new bipartisan amendment will do just that.”