December 11, 2018 / 9:14 PM / a year ago

UPDATE 1-U.S. lawmakers propose bill to ban sales to Chinese sanctions violators

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WASHINGTON, Dec 11 (Reuters) - Two U.S. lawmakers proposed a bill Tuesday that would direct the president to ban the sale of American products to Chinese telecommunications firms that violate U.S. export or sanctions laws, a measure aimed directly at two Chinese giants, telecoms company Huawei Technologies and ZTE Corp.

The bill proposed by the congressmen - Mike Gallagher, a Wisconsin Republican, and Ruben Gallego, an Arizona Democrat - would require that an affected company establish “a pattern of compliance” over a year for the ban to be lifted, according to a news release.

“Huawei and ZTE’s every action is dictated by the Chinese Communist Party. For years, they have conducted complex and systematic attacks on U.S. telecommunications, compromising the information security of our government, our allies, and private companies around the world,” Representative Gallego said in a statement.

Huawei is the world’s largest supplier of telecommunications network equipment and second-biggest maker of smartphones, with revenue of about $92 billion last year.

Unlike other big Chinese technology firms, it does much of its business overseas and that business appears be in doubt at countries lose confidence that Huawei equipment is secure.

A Canadian provincial court is currently weighing whether to grant bail to a top Huawei executive, Chief Financial Officer Meng Wanzhou, who is facing possible extradition to the United States to face accusations she misled multinational banks about Huawei’s control of a company operating in Iran.

For its part, ZTE paid $1 billion to the U.S. government in 2018 in relation to sanctioned business in Iran and North Korea. The U.S. Commerce Department said ZTE made false statements about disciplining 35 employees involved in the illegal shipping of U.S.-origin goods to Iran.

The bill would bar the president and other executive branch agency officials from changing any penalty slapped on a Chinese telecommunications firm until the president certifies that the company has not violated sanctions or other U.S. laws for a year, the press statement said. (Reporting by Diane Bartz Editing by Sonya Hepinstall and Jonathan Oatis)

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