January 16, 2019

Van Hollen, Gallego, Cotton, & Gallagher Introduce Bill to Impose Denial Orders on Chinese Telecom Companies That Violate U.S. Sanctions

Today Senator Chris Van Hollen (D-MD), Representative Ruben Gallego (D-AZ), Senator Tom Cotton (R-AR) and Representative Mike Gallagher (R-WI) introduced the bipartisan Telecommunications Denial Order Enforcement Act to direct the President to impose denial orders banning the export of U.S. parts and components to Chinese telecommunications companies that are in violation of U.S. export control or sanctions laws. The legislation follows the news that Meng Wanzhou, Huawei’s chief financial officer, was arrested last month in Canada at the request of U.S. prosecutors on charges of violating U.S. sanctions. Click here for text of the bill.

“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 Senator Van Hollen.  

“Huawei and ZTE’s actions to systematically undermine U.S. and allied cybersecurity show that Beijing does not wish to be part of the rules based system, but rather to break it. I am pleased to have Senators Cotton and Van Hollen join with me and Representative Gallagher to show that attacking the United States, its allies, and the international norms that are the basis for China’s own progress will result in severe penalties,” said Rep. Gallego.

“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 U.S. interests and enforce our laws. If Chinese telecom companies 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 Senator Cotton.

“Chinese telecommunications firms like Huawei represent a growing threat to American national security. As state-directed enterprises, they ultimately report to the Chinese Communist Party and will be employed where and whenever possible to undermine American interests and those of our allies. 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 Rep. Mike Gallagher.

Measures included in the Telecommunications Denial Order Enforcement Act include: 

  • Establishing that it is U.S. policy to enforce denial orders banning the export of U.S. parts and components to Chinese telecommunications companies that have violated U.S. export control laws or sanctions.
  • Directing the President to impose the same strict penalties originally faced by ZTE on any Chinese telecommunications firm found to be in violation of U.S. export control laws or sanctions.
  • Ensuring that penalties for violating U.S. export control laws or sanctions are not withdrawn until a pattern of compliance and cooperation over the course of a year proves that policies surrounding systematic lawbreaking by Chinese telecommunications firms have been changed.
  • Prohibiting any executive agency official from modifying any penalty imposed on Chinese telecommunications companies, their agents, or affiliates until the President certifies that the company has not violated US laws for one year and is cooperating fully with U.S. investigations.
  • Highlighting the Congressional role in overseeing Executive Branch export control and sanctions determinations regarding Chinese telecommunications companies.