House Author of Export Controls Bill Says It Has a Good Chance of Passage

A House bill that would require the U.S. government to ban all U.S. exports to any company that violates export controls or sanctions has appeal on both the right and left, said Rep. Mike Gallagher, R-Wis., in a recent interview. The bill, H.R. 602, which so far only has Reps. Ruben Gallego, D-Ariz., and Vicky Hartzler, R-Mo., as co-sponsors, is a companion bill to a Senate effort led by Sen. Tom Cotton, R-Ariz.

Six months after passage, it would require the administration to report if Huawei, ZTE or other Chinese telecommunications companies are in violation. If they are, they must receive the "death penalty," as denial orders are colloquially known, unless the administration says it has been a year since the last violation and the company is fully cooperating. After that, the administration would have to report annually.

The issue of a denial order for ZTE was controversial last year, when the Commerce Department first levied one, then rescinded it after a settlement. Cotton and others tried to reinstitute the ban, though Commerce would still have been able to avoid it by arguing that the company was fully cooperating, and it had been a year since the last violation.

Gallagher said his bill "doesn't re-litigate the death penalty controversy from last year." He said that with the arrest of a Huawei employee in Poland as a spy, the Justice Department case against Huawei, and the detention of Huawei's chief financial officer, there's "a growing awareness in Congress that this is a problem." He added: "Given that the [Department of Justice] charges include sanctions violations, if H.R. 602 is enacted, Huawei could be in a lot of trouble.”

David Shear, a senior adviser at McLarty Associates and former assistant secretary of Defense for Asian and Pacific Security Affairs, said some of the firm's clients are anxious about the Cotton and Gallagher bills. Several clients are major suppliers to those Chinese telecom firms. "Congress is giving an extraordinary amount of negative attention to Huawei," he said.