Tue, Jun 11, 2019 - Page 7 News List

Office seeks delay on Huawei ban for contractors

‘ADDITIONAL TIME’:The proposal aims to ensure that US firms that receive federal grants and loans have time to untangle themselves from doing business with Huawei

Reuters, WASHINGTON

The White House Office of Management and Budget has asked the US Congress for more time to phase in a ban on federal contracts with companies that do business with Huawei Technologies Co, part of a defense law passed last year.

The ban is one part of a multifaceted US push against Huawei, the world’s largest telecoms network gear maker, which Washington has accused of espionage and stealing intellectual property.

Huawei has repeatedly denied it is controlled by the Chinese government, military or intelligence services. It has filed a lawsuit against the US government over the restrictions in the defense policy bill.

The defense law, called the National Defense Authorization Act (NDAA), placed a broad ban on the use of federal money to purchase products from Huawei, citing national security concerns.

It included a ban on direct federal purchases of Huawei equipment, which is to take effect this year.

However, the White House said the government needed two additional years to work out rules for another part of the law, which requires third-party suppliers and contractors to restrict their purchases and use of Huawei equipment.

“This is about ensuring that companies who do business with the US government or receive federal grants and loans have time to extricate themselves from doing business with Huawei and other Chinese tech companies listed in the NDAA,” office spokesman Jacob Wood said in a statement.

Acting office Director Russ Vought asked congressional leaders and US Vice President Mike Pence for the delay in a letter earlier this week.

Vought said the delay would “ensure the effective implementation of the prohibition without compromising desired security objectives,” and said there would be a “dramatic reduction” in the number of contractors able to sell to the US government without a delay.

Vought asked that restrictions against purchasing Huawei equipment imposed on government contractors begin in four years, rather than two years.

The delay would allow “additional time to think through the associated potential impacts and possible solutions,” he said.

The requested delay would not stop or affect the timing of a separate US Department of Commerce rule that added Huawei to its “entity list,” a blacklist that bans the company from buying parts and equipment from US firms without US government approval.

US President Donald Trump also last month signed an executive order that bars US companies from using telecommunications equipment made by firms deemed to post a national security risk.

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