Telecommunications Denial Order Enforcement Act

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. Short title This Act may be cited as the Telecommunications Denial Order Enforcement Act 2. Statement of policy It shall be the policy of the United States to enforce denial orders on covered telecommunications companies found to have violated the export control or sanctions laws of the United States. 3. Imposition and enforcement of denial orders with respect to covered telecommunications companies (a) Imposition of denial orders (1) In general Not later than 180 days after the date of the enactment of this Act, and annually thereafter— (A) the President shall determine and report to the appropriate congressional committees if any covered telecommunications company is in violation of an export control or sanctions law of the United States; and (B) if the President makes an affirmative determination with respect to a covered telecommunications company under subparagraph (A), the President shall impose penalties pursuant to a denial order with respect to the company or its agents or affiliates as described in paragraph (2). (2) Penalties described The penalties described in this paragraph are the following (A) The covered telecommunications company and when acting for or on their behalf, their successors, assigns, directors, officers, employees, representatives, or agents (hereinafter each a denied person item (B) No person may, directly or indirectly, do any of the following: (i) Export or reexport to or on behalf of a denied person any item subject to the Export Administration Regulations. (ii) Take any action that facilitates the acquisition or attempted acquisition by a denied person of the ownership, possession, or control of any item subject to the Regulations that has been or will be exported from the United States, including financing or other support activities related to a transaction whereby a denied person acquires or attempts to acquire such ownership, possession or control. (iii) Take any action to acquire from or to facilitate the acquisition or attempted acquisition from a denied person of any item subject to the Export Administration Regulations that has been exported from the United States. (iv) Obtain from a denied person in the United States any item subject to the Export Administration Regulations with knowledge or reason to know that the item will be, or is intended to be, exported from the United States. (v) Engage in any transaction to service any item subject to the Export Administration Regulations that has been or will be exported from the United States and which is owned, possessed or controlled by a denied person, or service any item, of whatever origin, that is owned, possessed or controlled by a denied person if such service involves the use of any item subject to the Export Administration Regulations that has been or will be exported from the United States. (3) Report The President shall submit to the appropriate congressional committees an annual report on the implementation of this subsection. (b) Prohibition on modification of penalties Notwithstanding any other provision of law, no official of an executive agency may modify any penalty, including a penalty imposed pursuant to a denial order, implemented by the Government of the United States with respect to a covered telecommunications company or its agents or affiliates pursuant to a determination that the company has violated an export control or sanctions law of the United States until the date that is 30 days after the President certifies to the appropriate congressional committees that the company— (1) has not, for a period of one year, conducted activities in violation of the laws of the United States; and (2) is fully cooperating with investigations into the activities of the company conducted by the Government of the United States, if any. (c) Regulations The President is authorized to prescribe such regulations as may be necessary to carry out this section. (d) Definitions (1) Appropriate congressional committees The term appropriate congressional committees (A) the Committee on Financial Services and the Committee on Foreign Affairs of the House of Representatives; and (B) the Committee on Banking, Housing, and Urban Affairs and the Committee on Foreign Relations of the Senate. (2) Covered telecommunications company The term covered telecommunications company (A) Huawei Technologies Company or ZTE Corporation (or any subsidiary or affiliate of such entities). (B) Any other telecommunications company domiciled in the People’s Republic of China (or any subsidiary or affiliate of such entities), excluding any subsidiary of a foreign company domiciled in the People’s Republic of China. (3) Executive agency The term executive agency (A) an executive department specified in section 101 of title 5, United States Code; (B) a military department specified in section 102 of title 5, United States Code; (C) an independent establishment as defined in section 104(1) of title 5, United States Code; and (D) a wholly-owned Government corporation fully subject to chapter 91

Summary: Telecommunications Denial Order Enforcement Act This bill directs the President to determine annually whether telecommunications companies domiciled in China, including Huawei and ZTE, have violated U.S. export controls or sanctions. If a violation is found, the President must impose appropriate penalties. Chinese subsidiaries of foreign companies are excluded from the bill. The bill also prohibits executive agencies from reducing any penalty imposed on a Chinese telecommunications company for violating a sanction or export control, unless the President certifies that the company has not violated U.S. law for at least one year and is fully cooperating with investigations.