Congress won't reinstate stiff penalties on Chinese telecom giant ZTE

Congress won't reinstate stiff penalties on Chinese telecom giant ZTE
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Members of the House and Senate announced on Monday that they have decided to strip a provision from the final version of a must-pass defense policy bill that reinstates stiff penalties on Chinese telecommunications giant ZTE.

The news arrives after The Hill initially reported on Friday that congressional sources familiar with the bill said the language would be nixed from the final version of the National Defense Authorization Act (NDAA). 

The Senate had passed tougher language in its initial version that would have kept in place stiff penalties on the telecommunications firm, including blocking ZTE from buying American components. 

In the final version of the annual defense policy bill, lawmakers softened the language with a more mild provision that blocks companies that work with the US government from using ZTE or Huawei technology. Such companies will also reportedly have five years to get rid of ZTE and Huawei equipment.

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Sen. Marco RubioMarco Antonio RubioTrump putting TikTok ban on hold for 45 days: report The Hill's Morning Report - Presented by the Air Line Pilots Association - Biden VP possible next week; Meadows says relief talks 'miles apart' Pompeo: Trump taking action on Chinese software firms 'in coming days' MORE (R-Fla.) said in a statement that he was “shocked” lawmakers weakened the act in the final version, as language included in the Senate's initial version of the act would have kept in place tough penalties imposed on the company after it admitted to violating sanctions on Iran and North Korea.

"No nation steals American intellectual property or spies on America more than China, and Chinese telecommunication companies are among the most powerful tools they use to do this," Rubio said in the statement. 

"That is why I fought so hard last month to put ZTE out of business. And that is why I am so shocked that some of my colleagues decided to let ZTE continue to do business,” Rubio added. 

A House staffer pushed back strongly against Rubio's comments on Monday.

"What we focused on is what was in the purview of the defense committees, which is we're clear that U.S. government should not be buying technology or equipment from Huawei, ZTE," the staffer told reporters.

The news also comes weeks after the Trump administration officially lifted a ban on U.S. companies selling to ZTE, after it reached an agreement to revive the business. That decision came amid a wave of criticism from many Republican lawmakers and followed years of warnings about ZTE from the intelligence community.

-Rebecca Kheel contributed to this report which was updated at 11:57 a.m.