Defending U.S. Government Communications Act

Summary: Defending U.S. Government Communications Act This bill prohibits federal agencies from procuring or obtaining, renewing or extending a contract to obtain or procure, or entering into a contract with an entity that uses any equipment, system, or service with telecommunications equipment or services&nbsp;as a substantial or essential component of any system that is from Huawei Technologies Company, ZTE Corporation, or an entity reasonably believed to be owned or controlled by China.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Defending U.S. Government 
Communications Act''.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) In its 2011 ``Annual Report to Congress on Military and 
        Security Developments Involving the People's Republic of 
        China'', the Department of Defense stated that, ``China's 
        defense industry has benefited from integration with a rapidly 
        expanding civilian economy and science and technology sector, 
        particularly elements that have access to foreign technology. 
        Progress within individual defense sectors appears linked to 
        the relative integration of each, through China's civilian 
        economy, into the global production and R&D chain . . . 
        Information technology companies in particular, including 
        Huawei, Datang, and Zhongxing, maintain close ties to the 
        PLA.''.
            (2) In a 2011 report titled ``The National Security 
        Implications of Investments and Products from the People's 
        Republic of China in the Telecommunications Sector'', the 
        United States China Commission stated that ``[n]ational 
        security concerns have accompanied the dramatic growth of 
        China's telecom sector. . . . Additionally, large Chinese 
        companies - particularly those `national champions' prominent 
        in China's `going out' strategy of overseas expansion - are 
        directly subject to direction by the Chinese Communist Party, 
        to include support for PRC state policies and goals.''.
            (3) The Commission further stated in its report that 
        ``[f]rom this point of view, the clear economic benefits of 
        foreign investment in the U.S. must be weighed against the 
        potential security concerns related to infrastructure 
        components coming under the control of foreign entities. This 
        seems particularly applicable in the telecommunications 
        industry, as Chinese companies continue systematically to 
        acquire significant holdings in prominent global and U.S. 
        telecommunications and information technology companies.''.
            (4) In its 2011 Annual Report to Congress, the United 
        States China Commission stated that ``[t]he extent of the 
        state's control of the Chinese economy is difficult to quantify 
        . . . There is also a category of companies that, though 
        claiming to be private, are subject to state influence. Such 
        companies are often in new markets with no established SOE 
        leaders and enjoy favorable government policies that support 
        their development while posing obstacles to foreign 
        competition. Examples include Chinese telecoms giant Huawei and 
        such automotive companies as battery maker BYD and vehicle 
        manufacturers Geely and Chery.''.
            (5) General Michael Hayden, who served as Director of the 
        Central Intelligence Agency and Director of the National 
        Security Agency, stated in July 2013 that Huawei had ``shared 
        with the Chinese state intimate and extensive knowledge of 
        foreign telecommunications systems it is involved with.''.
            (6) The Federal Bureau of Investigation, in a February 2015 
        Counterintelligence Strategy Partnership Intelligence Note 
        stated that, ``[w]ith the expanded use of Huawei Technologies 
        Inc. equipment and services in U.S. telecommunications service 
        provider networks, the Chinese Government's potential access to 
        U.S. business communications is dramatically increasing. 
        Chinese Government-supported telecommunications equipment on 
        U.S. networks may be exploited through Chinese cyber activity, 
        with China's intelligence services operating as an advanced 
        persistent threat to U.S. networks.''.
            (7) The FBI further stated in its February 2015 
        counterintelligence note that, ``China makes no secret that its 
        cyber warfare strategy is predicated on controlling global 
        communications network infrastructure.''.
            (8) At a hearing before the Committee on Armed Services of 
        the House of Representatives on September 30, 2015, Deputy 
        Secretary of Defense Robert Work, responding to a question 
        about the use of Huawei telecommunications equipment, stated, 
        ``In the Office of the Secretary of Defense, absolutely not. 
        And I know of no other--I don't believe we operate in the 
        Pentagon, any [Huawei] systems in the Pentagon.''.
            (9) At such hearing, the Commander of the United States 
        Cyber Command, Admiral Mike Rogers, responding to a question 
        about why such Huawei telecommunications equipment is not used, 
        stated, ``as we look at supply chain and we look at potential 
        vulnerabilities within the system, that it is a risk we felt 
        was unacceptable.''.
            (10) In March 2017, ZTE Corporation pled guilty to 
        conspiring to violate the International Emergency Economic 
        Powers Act by illegally shipping U.S.-origin items to Iran, 
        paying the United States Government a penalty of $892,360,064 
        dollars for activity between January 2010 and January 2016.
            (11) The Treasury Department's Office of Foreign Assets 
        Control issued a subpoena to Huawei as part of a Federal 
        investigation of alleged violations of trade restrictions on 
        Cuba, Iran, Sudan, and Syria.
            (12) In the bipartisan House Permanent Select Committee on 
        Intelligence ``Investigative Report on the United States 
        National Security Issues Posed by Chinese Telecommunication 
        Companies Huawei and ZTE'' released in 2012, it was recommended 
        that ``U.S. government systems, particularly sensitive systems, 
        should not include Huawei or ZTE equipment, including in 
        component parts. Similarly, government contractors - 
        particularly those working on contracts for sensitive U.S. 
        programs - should exclude ZTE or Huawei equipment in their 
        systems.''.

SEC. 3. PROHIBITION ON CERTAIN TELECOMMUNICATIONS SERVICES OR 
              EQUIPMENT.

    (a) Prohibition on Agency Use or Procurement.--The head of an 
agency may not procure or obtain, may not extend or renew a contract to 
procure or obtain, and may not enter into a contract (or extend or 
renew a contract) with an entity that uses any equipment, system, or 
service that uses covered telecommunications equipment or services as a 
substantial or essential component of any system, or as critical 
technology as part of any system.
    (b) Definitions.--In this section:
            (1) Agency.--The term ``agency'' has the meaning given that 
        term in section 551 of title 5, United States Code.
            (2) Covered foreign country.--The term ``covered foreign 
        country'' means the People's Republic of China.
            (3) Covered telecommunications equipment or services.--The 
        term ``covered telecommunications equipment or services'' means 
        any of the following:
                    (A) Telecommunications equipment produced by Huawei 
                Technologies Company or ZTE Corporation (or any 
                subsidiary or affiliate of such entities).
                    (B) Telecommunications services provided by such 
                entities or using such equipment.
                    (C) Telecommunications equipment or services 
                produced or provided by an entity that the head of the 
                relevant agency reasonably believes to be an entity 
                owned or controlled by, or otherwise connected to, the 
                government of a covered foreign country.