Monday, October 15, 2012

House Intelligence Committee on Oversees Sellers

Earlier this week the U.S. House Intelligence Committee released a detailed report warning U.S. companies against Huawei and ZTE. Reuters and other news sources reported that these two companies have been classified as potential threats to U.S. security due to their close ties with the Chinese government. Companies that had used Huawei equipment reported allegations of unexpected behavior, including routers allegedly sending data to China late at night. While the committee did not go as far as banning the companies, it did urge American businesses to avoid Huawei and ZTE in their telecommunication projects. This new report has made it even more difficult for the two companies to expand in the U.S. market. 

The biggest concern brought to light by the committee, as outlined in the report, was that allowing Chinese organizations access to the telecommunications networks in the U.S. could compromise the nation’s infrastructure. A key part of the report was that the country’s infrastructure is highly interconnected and includes everything from rail networks to water systems. The report indicated that a disruption in one could have a ripple effect that could compromise many others. 

"Throughout the months-long investigation, both Huawei and ZTE sought to describe, in different terms, why neither company is a threat to U.S. national-security interests. Unfortunately, neither ZTE nor Huawei have cooperated fully with the investigation, and both companies have failed to provide documents or other evidence that would substantiate their claims or lend support for their narratives," "Huawei, in particular, provided evasive, nonresponsive, or incomplete answers to questions at the heart of the security issues posed. The failure of these companies to provide responsive answers about their relationships with and support by the Chinese government provides further doubt as to their ability to abide by international rules," stated the report.

-The Approved Team

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