A bipartisan group of legislators in the United States has introduced bills that would prohibit the sale of US chips or other components to Chinese telecommunications companies that violate Washington’s sanctions or export control laws.
The proposed law was introduced on Wednesday shortly before the Wall Street Journal reported that US authorities are in the “advanced” stages of a criminal probe that could result in an indictment of Chinese technology giant Huawei, the second-largest global smartphone maker and biggest producer of telecommunications equipment.
Citing anonymous sources, the Journal said that an indictment could be coming soon on allegations that Huawei stole Tappy, a T-Mobile technology which mimicked human fingers and was used to test smartphones.
Huawei said in a statement the company and T-Mobile settled their disputes in 2017 following a US jury verdict that found “neither damage, unjust enrichment nor willful and malicious conduct by Huawei in T-Mobile’s trade secret claim”.
Huawei’s challenges in US market
On Capitol Hill, the bills introduced by Senator Tom Cotton and Representative Mike Gallagher, both Republicans, along with Senator Chris Van Hollen and Representative Ruben Gallego, both Democrats, specifically cite Huawei and ZTE, both of which are viewed with suspicion in the US because of fears that their switches and other gear could be used to spy on US citizens.
Both have also been accused of failing to respect US sanctions on Iran.
“Huawei is effectively an intelligence-gathering arm of the Chinese Communist Party whose founder and CEO was an engineer for the People’s Liberation Army,” Cotton wrote in a statement. “If Chinese telecom companies like Huawei violate our sanctions or export control laws, they should receive nothing less than the death penalty – which this denial order would provide.”
The move is the latest in a long list of actions taken to fight what some in Washington call China’s cheating through intellectual property theft, illegal corporate subsidies and rules hampering US corporations that want to sell their goods in China.
The proposed law and investigation are two of several challenges that Huawei faces in the US market.
In addition to allegations of sanctions-busting and intellectual property theft, Washington has been pressing allies to refrain from buying Huawei’s switches and other gear because of fears they will be used by Beijing for espionage.
‘Huawei would not share user secrets’
Ren Zhengfei, the founder of Huawei, denied this week that his company was used by the Chinese government to spy.
In his most direct public response to accusations that his company is controlled by the ruling Communist Party, or is required to facilitate Chinese spying, Ren said on Tuesday that his company would refuse to disclose secrets about its customers and their communication networks.
“We would definitely say no to such a request,” Ren said in a rare meeting with foreign reporters.
Canada detained Ren’s daughter, Meng Wanzhou, who is Huawei’s chief financial officer, in December at the request of US authorities investigating an alleged scheme to use the global banking system to evade Washington’s sanctions against Iran.
The case of Meng, who has denied wrongdoing and is under house arrest awaiting proceedings, has heightened tensions between the US and China, as well as between Ottawa and Beijing.