Biden signs legislation to tighten US restrictions on Huawei, ZTE

Biden signs legislation that will prevent large tech companies from acquiring equipment licenses in the US.

WASHINGTON:

US President Joe Biden on Thursday signed legislation to prevent companies like Huawei Technologies Co (HWT.UL) or ZTE Corp (000063.SZ)that are deemed security threats from receiving new equipment licenses from US regulators.

The Secure Equipment Act, the latest effort by the U.S. government to crack down on Chinese telecom and tech companies, was approved unanimously by the US Senate on Oct. 28 and earlier in the month by the US House on a 420-4 vote.

The signing comes days before Biden and Chinese leader Xi Jinping are expected to hold a virtual summit. Reuters reported the meeting is expected Monday, amid tensions over trade, human rights and military activities.

The new law requires the Federal Communications Commission (FCC) to no longer review or approve any authorization application for equipment that poses an unacceptable risk to national security.

FCC Commissioner Brendan Carr said the commission has approved more than 3,000 applications from Huawei since 2018. The law "will help to ensure that insecure gear from companies like Huawei and ZTE can no longer be inserted into America’s communications networks," Carr said.

In March, the FCC designated five Chinese companies as posing a threat to national security under a 2019 law aimed at protecting US communications networks.

The named companies included previously designated Huawei and ZTE, as well as Hytera Communications Corp (002583.SZ), Hangzhou Hikvision Digital Technology Co (002415.SZ) and Zhejiang Dahua Technology Co (002236.SZ).

The FCC in June voted unanimously to advance a plan to ban approvals for equipment in US telecommunications networks from those Chinese companies even as lawmakers pursued legislation to mandate it.

The FCC vote in June drew opposition from Beijing.

"The United States, without any evidence, still abuses national security and state power to suppress Chinese companies," Zhao Lijian, a spokesperson at China's foreign ministry, said in June.

Under proposed rules that won initial approval in June, the FCC could also revoke prior equipment authorizations issued to Chinese companies.

Huawei in June called the proposed FCC revision "misguided and unnecessarily punitive."

Last month, the FCC voted to revoke the authorization for China Telecom's US subsidiary to operate in the United States, citing national security concerns.