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Senators Push Defense Amendment to Restore ZTE Sanctions

Proposal would effectively block ZTE from American technology — again

Sen. Tom Cotton is leading a bipartisan effort to restore penalties on ZTE. (Bill Clark/CQ Roll Call)
Sen. Tom Cotton is leading a bipartisan effort to restore penalties on ZTE. (Bill Clark/CQ Roll Call)

A bipartisan contingent of senators wants to use the defense authorization to restore penalties against Chinese telecommunications firm ZTE that were eased Thursday morning.

Republican Sen. Tom Cotton of Arkansas joined Democratic Sens. Chris Van Hollen of Maryland and Charles E. Schumer of New York in filing the legislation as an amendment to the defense programs bill. Senators are expected to begin amendment debate on the broader legislation early next week.

The involvement of Schumer, the minority leader, makes it likely to be a priority item for potential addition to the legislation reported from the Armed Services Committee.

“Sen. Cotton and Sen. Van Hollen don’t agree on much, but thank God when it comes to national security, they’re agreeing,” Schumer said earlier in the day on the Senate floor.

The minority leader said senators should overwhelmingly vote for the Cotton-Van Hollen amendment, which he is cosponsoring — “as I believe Sen. Cornyn and others on the other side will do.” 

“We hope that Leader McConnell will allow a vote, or at minimum put it in the manager’s package,” Schumer said. “We cannot move forward with this danger to national security without doing something about ZTE.”

A Van Hollen provision already in the defense bill would require Trump to certify to Congress that certain Chinese telecommunications companies such as ZTE and Huawei have obeyed U.S. laws for one year and worked in cooperation with U.S. investigators before pulling back the economic sanctions imposed on the companies.

ZTE had been blocked from accessing U.S. technology for export control violations.

“Huawei and ZTE have extensive ties with the Chinese Community Party, as well as a track record of doing business with rogue regimes like North Korea and Iran,” Cotton said in a statement. “So it’s only prudent that no one in the federal government use their equipment or services and that they receive no taxpayer dollars. Given their repeated violations of U.S. law, we cannot trust them to respect U.S. national security, and so it’s vital we hold them accountable and pass this amendment.”

That provision would not have had an impact on the already-lifted prohibition on U.S. export sales to ZTE.

“This would effectively reinstate the penalties and require the president to make certain certifications,” Van Hollen said. “I think there’s strong bipartisan support for this effort. Nobody wants to be trading away national security interests for other issues on an ad hoc basis.”

The original Van Hollen language has already had an interesting legislative journey, being included in a Banking Committee bill to expand security reviews of cross-border business transactions by the Committee on Foreign Investment in the U.S., that’s hitching a ride on the fiscal 2019 defense measure.

In addition to Cotton, Schumer and Van Hollen, Florida Sens. Bill Nelson and Marco Rubio are backing the new amendment, along with Sens. Richard Blumenthal of Connecticut and Susan Collins of Maine.

Senators voted to limit debate on the motion to proceed to the underlying defense measure Thursday afternoon before finishing up work for the week.

Commerce Secretary Wilbur Ross announced an agreement with ZTE early Thursday that would impose additional financial penalties on and install U.S.-approved compliance officials within ZTE.

“We will closely monitor ZTE’s behavior. If they commit any further violations, we would again be able to deny them access to U.S. technology as well as collect the additional $400 million in escrow. The first settlement with ZTE set a record for civil and criminal penalties in an export control case,” Ross said in a statement. “This new settlement agreement sets another record, and brings the total penalties assessed on ZTE to $2.29 billion.”

Watch: Rubio Leads Chorus of Lawmakers Critical of Trump’s Trade Talks With China

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