Fri, Aug 09, 2019 - Page 10 News List

US formalizes ban on contracts to Chinese firms


The US on Wednesday unveiled rules formally banning technology giant Huawei Technologies Co (華為) and other Chinese firms from US government contracts.

The interim regulations, which are to be effective from Tuesday next week, preclude any US federal agency from purchasing telecom or technology equipment from the firms “as a substantial or essential component of any system, or as a critical technology as part of any system.”

The rules implement a ban included in the defense authorization act that the US Congress approved earlier this year.

Waivers to the rules may be granted “under certain circumstances” by an agency head for up to two years, or by the director of US national intelligence in other cases, which were not specified.

Huawei said it would press its court challenge to the constitutionality of the ban in federal court.

In a statement, the company said the law “will do nothing to ensure the protection of US telecom networks and systems and rather is [a] trade barrier based on country-of-origin, invoking punitive action without any evidence of wrongdoing.”

The new rules are part of a sweeping effort by US President Donald Trump’s administration to restrict Huawei, which officials claim is linked to Chinese intelligence.

It also comes amid a heated dispute between the two economic powers over international trade rules.

The rules, which require a 60-day comment period, also bar contracts to ZTE Corp (中興通訊), Hytera Communications Corp (海能達通信), Hangzhou Hikvision Digital Technology Co (杭州海康威視數字技術) and Zhejiang Dahua Technology Co (浙江大華技術).

Huawei also faces sanctions that bar the export of US technology to the firm on national security grounds. That ban, which has been suspended until the middle of this month, could prevent Huawei from getting key hardware and software.

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