Gallagher, Cotton, and Colleagues Introduce Bill to Freeze Huawei from U.S. Financial System

March 12, 2020
Press Release

Rep. Mike Gallagher (R-WI) and Senator Tom Cotton (R-AR), along with a bipartisan group of colleagues, today introduced the Neutralizing Emerging Threats from Wireless OEMs Receiving direction from Kleptocracies and Surveillance states (NETWORKS) Act, companion bills that would add foreign companies producing 5G technology, like Huawei, to the U.S. Treasury Department’s Specially Designated Nationals (SDN) List should they engage in economic or industrial espionage or sanctions violations. Placing a company on the SDN List effectively freezes them from accessing the U.S. financial system and is one of the most effective tools the Treasury Department has to combat national security threats. The SDN List has previously been used against malign actors such as terrorist groups, Russian oligarchs, Iranian banks, and drug  traffickers. The House bill was co-led by Reps. Ruben Gallego (D-AZ), Liz Cheney (R-WY), Chrissy Houlahan (D-PA), and the Senate bill was co-led by Senators Chuck Schumer (D-NY), Rick Scott (R-FL), and Chris Van Hollen (D-MD). Click here for bill text.

“It’s clear that in order to protect global 5G networks, we need a full court press against malevolent actors like Huawei,” said Rep. Gallagher. “It’s time to go on the offensive by cutting Huawei out of the U.S. banking system. We’re nearing a decisive point for global 5G networks and we need to leverage every tool in our arsenal to protect a diverse telecommunications supply chain and stop the Chinese Communist Party’s bid to monopolize global networks. I’m proud the NETWORKS Act takes bold bipartisan action to do just that.”

“It’s time to sanction Huawei. For years, this arm of the Chinese Communist Party has stolen American intellectual property and violated U.S. sanctions with impunity. This legislation would cut Huawei off from the U.S. financial system, relegating it to pariah status alongside Russian oligarchs, Iranian terrorists, and Mexican drug cartels,” said Senator Cotton.

“American cutting edge technology has been systematically stolen by Chinese state actors for decades. As we develop 5G, it’s clear that this frontier is no different,” said Gallego. “Companies like Huawei who willfully compromise our information security and laws should be excluded from the global marketplace. I’m determined to work with my Congressional colleagues to protect U.S. networks and interests as we move into the 5G era,” said Rep. Gallego.  

“Just as a Russian or Iranian regime-controlled company that steals intellectual property or enables sanctions evasion would be placed on the Specially Designated Nationals (SDN) list, so should Huawei, a company controlled by the Chinese Communist Party that is facing charges for those exact activities. Security must be our first priority—especially when it comes to next-generation telecommunications. Companies like Huawei should not be given free rein to infiltrate and monopolize 5G networks. They must be barred from the financial system so that the U.S., our allies, and others are not enabling their nefarious campaign,” said Rep. Cheney.

“China has proven itself a great threat to our digital infrastructure,” said Rep. Houlahan. “That’s why we need to take deliberate action to protect ourselves and restrict companies like Huawei from accessing our banking system. My background is in supply chain management for major, international businesses, which is why I’m confident that our bipartisan, bicameral NETWORKS Act takes the necessary first steps to shore up our 5G infrastructure and to protect our digital network from malevolent actors.”

“China-based companies like Huawei cooperate heavily with the Chinese Communist Party and the Chinese government in political and economic espionage. Allowing China to dominate global 5G networks threatens America’s national security. It is time for the Trump administration to take swift and forceful action to block Huawei from accessing the U.S. financial system,” said Senator Schumer.

Senator Rick Scott said, “We know Huawei is supported and controlled by the communist regime in Beijing, which continues to violate human rights and steal our data, technology, and intellectual property. Huawei is being used as a tool for Communist China to commit espionage on foreign nations, their own citizens and anyone they see as a threat. The United States must do everything in our power to signal that Huawei is a threat to our national security, and I’m proud to sponsor the NETWORKS Act as we continue to hold Huawei accountable.”

“Foreign companies that spy on the U.S. and violate our laws should face severe consequences. Huawei is a repeat offender. This bill will sanction Huawei and any other bad actors to better protect our national security interests,” said Senator Van Hollen

The NETWORKS Act would:

  • Require the President to place companies engaging in sanctions violations or economic or industrial espionage to be placed on the U.S. Treasury Department’s SDN List, cutting Huawei out of the US financial system
  • Level the playing field for US companies by limiting the ability of any company, American or foreign, to transact with Huawei
  • Exempt transactions involving existing 3G or 4G networks in order to minimize disruption to global networks
  • Protect American technological leadership by allowing participation in international standards-setting bodies

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