US names 5 Chinese firms as posing threat to national security

WASHINGTON • The Federal Communications Commission (FCC) has designated five Chinese companies as posing a threat to national security under a 2019 law aimed at protecting US communications networks.

The FCC on Friday named the companies as Huawei Technologies, ZTE, Hytera Communications, Hangzhou Hikvision Digital Technology and Dahua Technology.

A 2019 law requires the FCC to identify companies producing telecommunications equipment and services "that have been found to pose an unacceptable risk to US national security".

Acting FCC chairman Jessica Rosenworcel said in a statement: "This list provides meaningful guidance that will ensure that as next-generation networks are built across the country, they do not repeat the mistakes of the past or use equipment or services that will pose a threat to US national security or the security and safety of Americans."

The 2019 law used criteria from a defence authorisation Bill that previously identified the five Chinese companies.

Last year, the FCC designated Huawei and ZTE as a national security threat to communications networks - a declaration barring US firms from tapping an US$8.3 billion (S$11.16 billion) government fund to purchase equipment from the companies.

In February, Huawei challenged the declaration in a petition filed with the Fifth US Circuit Court of Appeals.

Hikvision said late on Friday that it strongly opposed the FCC decision "and is weighing all options on how to best address this unsubstantiated designation. Hikvision does not belong on a list for next-generation networks".

The FCC in December finalised rules requiring carriers with ZTE or Huawei equipment to "rip and replace" that equipment. It created a reimbursement programme for that effort, and US lawmakers in December approved US$1.9 billion to fund the programme.

Meanwhile, a US federal judge on Friday temporarily blocked the Department of Defence from forcing American investors to divest their holdings in Chinese smartphone maker Xiaomi on the grounds that the company has ties to China's military.

The Defence Department, under the Trump administration in mid-January, had added Xiaomi and eight other firms to a list that requires Americans to sell their interests in the firms by a deadline. The restrictions were to take effect this week.

Xiaomi in late January filed a complaint in a Washington court seeking to be removed from the list, calling its inclusion "unlawful and unconstitutional" and arguing that it was not controlled by the People's Liberation Army.

US District Judge Rudolph Contreras in Washington said the court "concludes that defendants have not made the case that the national security interests at stake here are compelling". The Defence Department did not respond to a request for comment.

A Xiaomi spokesman, in a statement, welcomed the ruling and called the designation of Xiaomi as a Chinese military company "arbitrary and capricious", adding: "Xiaomi plans to continue to request that the court declare the designation unlawful and to permanently remove the designation".

REUTERS