US Releases Interim Rule Banning Huawei, Hikvision, Others From Government Contracts

The Office of Management and Budget on Wednesday afternoon published an interim rule banning federal agencies from purchasing telecom equipment from Huawei and four other Chinese firms.

The affected entities are Huawei, ZTE, Hytera, Hikvision and Dahua.

None of those names are surprising, and neither, really, is this announcement. The ZTE story is years old, Huawei is obviously the poster child for the US-China tech war and Hytera, Hikvision and Dahua were all in the news back in May when reports indicated the Trump administration was set to crack down on Chinese surveillance companies.

Read more: Hikvision, Dahua And Trump’s Widening Dragnet

“This interim rule… prohibits agencies from procuring or obtaining, or extending or renewing a contract to procure or obtain, any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as a critical technology as part of any system, on or after August 13, 2019”, the rule reads.

A couple of pages in, there’s an exemption that allows “the head of an executive agency to grant a one-time waiver on a case-by-case basis for up to a two-year period”. There’s also a provision that allows the Director of National Intelligence to grant waivers. (The US doesn’t currently have a Director of National Intelligence.)

Obviously, this has the potential to be confusing despite being telegraphed last year in the NDAA. “Contractors have said they are confused about the scope of the ban and what it will mean for their businesses”, Reuters notes.

Huawei, ZTE and Hytera did not respond to requests for comment by Reuters and Dahua was unreachable. Hikvision said it’s “made efforts to ensure the security of our products adhere to what is mandated by the US government”.

Hikvision was a hot topic back in May and will likely find itself under more pressure going forward as tensions between Washington and Beijing boil over.

Again, this isn’t anything “new”, per se, but it makes for more dour press at a time when markets are sensitive to any headlines featuring the word “Huawei”.

Interim rule