Agency Ban on ZTE, Huawei Purchases Makes NDAA Amendments List

Sens. Tom Cotton, R-Ark., and Chris Van Hollen, D-Md., said on Monday that an amendment they introduced last week to defense legislation that would ban government agencies from buying goods and services from China-based communications equipment makers ZTE and Huawei made the cut for inclusion into the National Defense Authorization Act (NDAA) for FY 2019.

The amendment–which is co-sponsored by Sens. Marco Rubio, R-Fla., Richard Blumenthal, D-Conn., Susan Collins, R-Maine, and Bill Nelson, D-Fla.–would blunt a recent move by the Trump administration to lighten U.S. penalties on ZTE for violating sanctions against selling products and services to Iran and North Korea.

In 2017 ZTE agreed to pay $1.19 billion in fines for export control violations, and earlier this year the U.S. banned American companies from exporting components to ZTE for seven years after it found the firm had not complied with all aspects of the 2017 order. Last week, the administration said it would lessen the sanctions against ZTE if the company paid a $1 billion fine, among other steps.

Sen. Cotton said last week that his amendment would prohibit all Federal government agencies from buying or leasing equipment or services from ZTE and Huawei, ban the United States from using grants and loans to subsidize the Chinese firms, and restore penalties on ZTE for violating export controls.

“ZTE has repeatedly violated U.S. law and represents a threat to our national security–Congress cannot and will not allow the Administration to let ZTE off the hook in the interest of Chinese jobs,” Van Hollen said in a statement released yesterday. “I’m pleased that our bipartisan proposal will be included in the manager’s amendment to the National Defense Authorization Act, and I appreciate my colleagues on both sides of the aisle working together to protect American interests and national security.”

“Huawei and ZTE have extensive ties with the Chinese Communist Party, as well as a track record of doing business with rogue regimes like North Korea and Iran,” said Sen. Cotton when the amendment was first introduced. “So it’s only prudent that no one in the Federal government use their equipment or services and that they receive no taxpayer dollars. Given their repeated violations of U.S. law, we cannot trust them to respect U.S. national security, and so it’s vital we hold them accountable and pass this amendment.”