The Commerce Department should add ZTE to its Entity List now that its five-year probation period and U.S. criminal case has ended, said Sen. Marco Rubio, R-Fla., in a Monday letter to Commerce and the Justice Department. Rubio also expressed “disappointment and concern” that a U.S. court ruled this month against further penalties against the Chinese telecommunications company despite “credible evidence” that ZTE violated its probation. Rubio said the judge in the case “appeared unconvinced of any serious commitment to reform” by ZTE officials. “Given that the decision effectively marks the end of ZTE’s five-year probationary period, the net result is that a firm explicitly identified by the Federal Communications Commission as a national-security threat is today rewarded with relaxed oversight, despite its acknowledged noncompliance,” Rubio said in the letter. He said Commerce and DOJ should “take all appropriate measures against ZTE to ensure it cannot pose a threat to Americans,” including adding the company to Commerce’s export control blacklist. Spokespeople for Commerce and DOJ didn’t respond to requests for comment.
The Commerce Department should expand an exemption to allow U.S. companies to participate in standards-setting bodies that have members designated on the Entity List, the Information Technology Industry Council said in a set of recommendations to the Biden administration. If the exemption isn’t expanded, the U.S. will risk ceding further “ground, influence, and leadership to foreign competitors” in international technology standards development, ITI said Thursday. ITI also urged the administration to shift its China trade policy to better pressure the government on important trade issues. “Recent overreliance and expanded use of export controls, tariffs, and policies misdirected at routine technical standards development have hurt U.S. workers, consumers, and companies,” ITI said. “The Administration should amend policies that have not achieved their goals and even impeded U.S. innovation and leadership.”
The House Rules Committee will consider several telecom- and tech-focused amendments to the America Creating Opportunities for Manufacturing, Pre-Eminence in Technology and Economic Strength Act (HR-4521) Tuesday, for a potential floor vote on the measure later this week. The measure mirrors some elements of the Senate-passed U.S. Innovation and Competition Act (S-1260), including $52 billion in subsidies to encourage U.S.-based semiconductor manufacturing (see 2201260062). Many proposed amendments aim to make changes to the chips language.
The Treasury Department's Office of Foreign Assets Control added several more Chinese tech firms to its investment blacklist, including drone maker DJI, for allegedly helping Beijing track and detain Muslim minorities in Xinjiang. The move, announced Thursday, also banned investments in Cloudwalk Technology, Dawning Information Industry, Leon Technology, Megvii Technology, Netposa Technologies, Xiamen Meiya Pico Information and Yitu. All were already on the Commerce Department’s Bureau of Industry and Security entity list for export restrictions. The companies, which are now formally designated as having ties to the Chinese military, operate in China’s surveillance technology sector, OFAC said. The agency said DJI, the world’s largest commercial drone producer, supplies drones to the Xinjiang Public Security Bureau, which was added to the entity list in 2019. Technology supplied by the companies helped Xinjiang authorities confine more than a million Uyghurs and other Muslim minorities in detention centers, OFAC said. The companies “actively support the biometric surveillance and tracking of ethnic and religious minorities in China” through the “installation of thousands of neighborhood police kiosks and ubiquitous placement of surveillance cameras, collection of biometric data for identification purposes, and more intrusive monitoring of internet use,” OFAC said. A DJI spokesperson declined to comment. Megvii, CloudWalk, Xiamen Meiya Pico, Yitu, and NetPosa didn’t respond to requests for comment. Dawning and Leon couldn’t be reached. "The attempt of the U.S. to use Xinjiang to contain China will never succeed," said a Chinese Foreign Affairs Ministry spokesperson Friday. "China will take all necessary measures to resolutely safeguard the legitimate rights and interests of Chinese institutions and companies."
The Bureau of Industry and Security added 34 Chinese organizations to its entity list for actions “contrary to the national security or foreign policy interests” of the U.S., says Friday’s Federal Register. The agency also modified its May 2019 Huawei entity list entry by adding three Huawei “aliases” -- HMN Technologies, Huahai Zhihui Technology and HMN Tech. The Chinese Foreign Affairs Ministry didn’t comment.
Senate Commerce Committee ranking member Roger Wicker of Mississippi and seven other Republicans urged the Commerce Department Monday to beef up its enforcement of restrictions on U.S. exports to Huawei and other companies on the Bureau of Industry and Security’s entity list, citing what they consider insufficient implementation. Huawei has been on the entity list since May 2019 (see 1905210013). The House Foreign Affairs Committee revealed last month BIS approved $100 billion-plus worth of export licenses for shipments to Huawei and top Chinese chipmaker SMIC from Nov. 9, 2020, through April 20 (see 2110220019). Commerce’s “lax enforcement” of its Foreign Direct Product Rule “has the effect of incentivizing other tech-focused companies throughout the supply chain to jeopardize our country’s security by transacting with Entity List companies like Huawei,” the GOP senators wrote Secretary Gina Raimondo. “Unless BIS enforces this rule with the speed the situation necessitates, additional suppliers of sensitive technology will likely engage in unlawful trade practices with companies closely connected to adversarial governments.” The lawmakers encouraged Raimondo to act “to ensure that BIS is equipped to enforce the full arsenal of the Department’s export control regulations -- and meet the challenges posed by this precarious moment -- considering the harms to national security they are intended to prevent.” BIS didn’t comment.
The Bureau of Industry and Security will add four companies in Israel, Russia and Singapore to the entity list for "malicious cyber activities" contrary to U.S. foreign policy and national security, BIS said; see also a State Department announcement. The two Israeli companies that include NSO Group supply malicious spyware to foreign governments, and the companies in Russia and Singapore “traffic in cyber exploits” that threaten the “privacy and security of individuals and organizations worldwide.” BIS' parent agency the Commerce Department said these additions -- which take effect Thursday, when they're to be published in the Federal Register -- reflect a government-wide effort to "stem the proliferation of digital tools used for repression." Adding NSO and others is "long overdue," Access Now said. It said the EU and other governments "should implement similar restrictions on surveillance tech companies who facilitate human rights violations. The privacy advocacy group wants the U.S. government to sanction owners and affiliates of NSO Group and Candiru, another company that's being added to the BIS list. NSO "is dismayed by" BIS' decision because "our technologies support US national security interests and policies by preventing terrorism and crime," emailed a company spokesperson. "We will advocate for this decision to be reversed.”
The Bureau of Industry and Security approved $100 billion-plus worth of export licenses for shipments to Huawei and top Chinese chipmaker SMIC Nov. 9 through April 20, per documents released Thursday by the House Foreign Affairs Committee. BIS said it approved 113 licenses for Huawei -- about 70% of applications received -- for more than $61 billion worth of goods. The agency greenlit 188 licenses for SMIC -- about 90% -- for more than $41 billion. BIS denied two applications for Huawei and returned 48 without action during that period. It denied one for SMIC and returned 17. The companies are on the BIS parent agency's Commerce Department entity list.
Facebook was the top lobbying spender from tech and telecom in Q3, supplanting Amazon, the leader in recent quarters (see 2107210049). NCTA and Comcast again rounded out the top four. Most major tech and telecom companies' lobbying spending rose in Q3 compared with the same period in 2020; Huawei, the Computer & Communications Industry Association, IBM and Dell had the largest percentage increases. Apple, Broadcom and T-Mobile outlays dropped.
Commissioner Brendan Carr urged the FCC Tuesday to “immediately start the process” of adding China-based DJI, which has more than half the U.S. drone market, to the agency’s covered list. “The need for quick FCC action on this is very clear,” he told a virtual program sponsored by China Tech Threat. “What we’re seeing … is the potential for Huawei on wings.”