I 

115TH CONGRESS 

2D SESSION H. R. 7255 

To direct the President to impose penalties pursuant to denial orders with 

respect to certain Chinese telecommunications companies that are in 

violation of the export control or sanctions laws of the United States, 

and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 11, 2018 

Mr. GALLAGHER (for himself and Mr. GALLEGO) introduced the following bill; 

which was referred to the Committee on Foreign Affairs 

A BILL 

To direct the President to impose penalties pursuant to denial orders with respect to certain Chinese telecommunications companies that are in violation of the export 

control or sanctions laws of the United States, and for 

other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Telecommunications 

5 Denial Order Enforcement Act’’. 


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1 SEC. 2. STATEMENT OF POLICY. 

2 It shall be the policy of the United States to enforce 

3 denial orders on covered telecommunications companies 

4 found to have violated the export control or sanctions laws 

5 of the United States. 

6 SEC. 3. IMPOSITION AND ENFORCEMENT OF DENIAL OR7 DERS WITH RESPECT TO COVERED TELE8 COMMUNICATIONS COMPANIES. 

9 (a) IMPOSITION OF DENIAL ORDERS.— 

10 (1) IN GENERAL.—Not later than 60 days after 

11 the date of which a determination is made that a 

12 covered telecommunications company is in violation 

13 of an export control or sanctions law of the United 

14 States, the President shall impose a penalty pursu15 ant to a denial order with respect to the covered 

16 telecommunications company or its agents or affili17 ates as follows: 

18 (A) The company and when acting for or 

19 on their behalf, their successors, assigns, direc20 tors, officers, employees, representatives, or 

21 agents (hereinafter each a ‘‘denied person’’), 

22 may not, directly or indirectly, participate in 

23 any way in any transaction involving any com24 modity, software or technology (hereinafter col25 lectively referred to as ‘‘item’’) exported or to 

26 be exported from the United States that is subVerDate Sep 11 2014 21:54 Dec 13, 2018 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H7255.IH H7255

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1 ject to the Export Administration Regulations 

2 (as codified in subchapter C of chapter VII of 

3 title 15, Code of Federal Regulations, or any 

4 successor regulations), or in any other activity 

5 subject to the Export Administration Regula6 tions. 

7 (B) No person may, directly or indirectly, 

8 do any of the following: 

9 (i) Export or reexport to or on behalf 

10 of a denied person any item subject to the 

11 Export Administration Regulations. 

12 (ii) Take any action that facilitates 

13 the acquisition or attempted acquisition by 

14 a denied person of the ownership, posses15 sion, or control of any item subject to the 

16 Regulations that has been or will be ex17 ported from the United States, including 

18 financing or other support activities related 

19 to a transaction whereby a denied person 

20 acquires or attempts to acquire such own21 ership, possession or control. 

22 (iii) Take any action to acquire from 

23 or to facilitate the acquisition or attempted 

24 acquisition from a denied person of any 

25 item subject to the Export Administration 


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1 Regulations that has been exported from 

2 the United States. 

3 (iv) Obtain from a denied person in 

4 the United States any item subject to the 

5 Export Administration Regulations with 

6 knowledge or reason to know that the item 

7 will be, or is intended to be, exported from 

8 the United States. 

9 (v) Engage in any transaction to serv10 ice any item subject to the Export Admin11 istration Regulations that has been or will 

12 be exported from the United States and 

13 which is owned, possessed or controlled by 

14 a denied person, or service any item, of 

15 whatever origin, that is owned, possessed 

16 or controlled by a denied person if such 

17 service involves the use of any item subject 

18 to the Export Administration Regulations 

19 that has been or will be exported from the 

20 United States. 

21 (2) APPLICABILITY.—Paragraph (1) shall apply 

22 on and after the date of the enactment of this Act 

23 with respect to a determination described in para24 graph (1) that is made on or after such date of en25 actment. 


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1 (b) PROHIBITION ON MODIFICATION OF PEN2 ALTIES.—Notwithstanding any other provision of law, no 

3 official of an executive agency may modify any penalty, 

4 including a penalty imposed pursuant to a denial order, 

5 implemented by the Government of the United States with 

6 respect to a covered telecommunications company or its 

7 agents or affiliates pursuant to a determination that the 

8 company has violated an export control or sanctions law 

9 of the United States until the date that is 30 days after 

10 the President certifies to the appropriate congressional 

11 committees that the company— 

12 (1) has not, for a period of one year, conducted 

13 activities in violation of the laws of the United 

14 States; and 

15 (2) is fully cooperating with investigations into 

16 the activities of the company conducted by the Gov17 ernment of the United States, if any. 

18 (c) REGULATIONS.—The President is authorized to 

19 prescribe such regulations as may be necessary to carry 

20 out this section. 

21 (d) DEFINITIONS.— 

22 (1) APPROPRIATE CONGRESSIONAL COMMIT23 TEES.—The term ‘‘appropriate congressional com24 mittees’’ means— 


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1 (A) the Committee on Financial Services 

2 and the Committee on Foreign Affairs of the 

3 House of Representatives; and 

4 (B) the Committee on Banking, Housing, 

5 and Urban Affairs and the Committee on For6 eign Relations of the Senate. 

7 (2) COVERED TELECOMMUNICATIONS COM8 PANY.—The term ‘‘covered telecommunications com9 pany’’ means any of the following: 

10 (A) Huawei Technologies Company or 

11 ZTE Corporation (or any subsidiary or affiliate 

12 of such entities). 

13 (B) Any other telecommunications com14 pany domiciled in the People’s Republic of 

15 China (or any subsidiary or affiliate of such en16 tities), excluding any subsidiary of a foreign 

17 company domiciled in the People’s Republic of 

18 China. 

19 (3) EXECUTIVE AGENCY.—The term ‘‘executive 

20 agency’’ means— 

21 (A) an executive department specified in 

22 section 101 of title 5, United States Code; 

23 (B) a military department specified in sec24 tion 102 of title 5, United States Code; 


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1 (C) an independent establishment as de2 fined in section 104(1) of title 5, United States 

3 Code; and 

4 (D) a wholly-owned Government corpora5 tion fully subject to chapter 91 of title 31, 

6 United States Code. 

Æ 


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