It also requires CFIUS to consider foreign transactions in the context of investment trends that could threaten national security, such as the acquisition of multiple companies in a single industry segment. According to the White House fact sheet, areas listed as affecting US national security include microelectronics, artificial intelligence, quantum computing, biotechnology and advanced clean energy.

A senior U.S. administration official said the new executive order is part of the U.S. government’s efforts to protect the U.S. economy and technology because some countries are using the U.S. open investment ecosystem to advance their issues in ways that are directly contrary to U.S. values. and interests, leadership is an important part of efforts to protect US national security.

The executive order details two existing legal factors:

1. Certain transactions, including non-defense transactions, may have an impact on the US national security supply chain.

The transfer of ownership or control by foreign investors of certain production capabilities, services, critical mineral resources, or technologies critical to national security to foreigners may leave the United States vulnerable to future disruptions in the supply of critical goods and services.

2. Certain transactions will affect the United States’ technological leadership in national security.

Semiconductors, artificial intelligence, biotechnology, quantum computing, advanced clean energy, etc. While technologies, including but not limited to, help foreign investment stimulate local innovation in the United States in many cases, it is more important to protect the United States. technological leadership.

The executive order identifies three other factors that the committee should consider:

1. Certain transactions may affect industry investment trends regarding US national security.

Individually, foreign investment in an industry or technology poses a limited threat, but these investments from previous transactions can facilitate the transfer of sensitive technology in key industries or other areas and further endanger U.S. National Security.

2. Threats to national security-related cybersecurity risks.

This is because investments by foreigners with the ability and intent to engage in a cyberattack or other malicious cyber activity can pose a risk to national security.

This provision should consider the cybersecurity stance, capabilities and access rights of the parties, as well as assess whether the covered transactions could provide foreign persons or interested third parties with an opportunity to engage in such activities.

3. Risks associated with sensitive data of Americans.

Data is an increasingly powerful tool that can be used to spy on, track, and locate individuals or groups that have adverse effects on US national security. Additionally, technological advances have made it possible to re-identify or anonymize more and more data that was once unidentifiable.

The senior management official, who has not been named, said these issues are the continuing focus of CFIUS and that steps are being taken to address such risks, and executive orders have been signed to underline and strengthen the committee’s commitment to these evolving and emerging issues. and steering committees, companies and investors pre-identify the national security risks arising from transactions to help them decide whether or not to apply for CFIUS.

This executive order does not extend or limit the legal authority or jurisdiction of CFIUS, which continues to focus broadly on the assessment and mitigation of any national security risks arising from the transactions covered. “This is the biggest point that can have a real impact on how deals are evaluated [in the executive order],” said Sarah Bauerle Danzman, associate professor of international studies at Indiana University and a former foreign investment analyst at the U.S. Department of State. .
“The Commission takes very seriously the wording in the statute regarding conditions that prevent or mitigate transactions,” he said.

The order does not change or expand the legal mandate of the CFIUS, but Bauerle Danzman said he was concerned that expanding the category of technologies with national security implications could result in the review process being misused for competitive purposes, not just national security.

“I hope the committee continues to act with relative restraint and not overstate its mandate to block all such deals,” he said. While China is not named this time, the areas targeted by the order overlap with some of the US national security concerns raised about Beijing’s technological ambitions.

The Biden administration’s efforts to protect US technology have also prompted the Commerce Department, which has recently tightened restrictions on Chinese chip exports. The Chinese side condemned it. “The US approach deviates from the principle of fair competition and violates international economic and trade rules,” said Shu Jueting, spokesperson for the Department of Commerce.

A senior Biden administration official stressed that the new executive order does not target China. “There is nothing specific to China about this order or CFIUS. Now having said that, it will matter where the investment comes from and who the investors are,” the official said on Wednesday.

Sarah Bauerle Danzman said: “People are not only concerned about the real players trying to buy the company, but also about the possibility of third-party risk.” For example, companies that do not pose a risk themselves can be flagged if their cybersecurity practices are breached.

“It’s wrong to think there’s only one China,” she said.
This is the first time since the CFIUS was founded in 1975, the president has issued specific instructions to the CFIUS from various US federal departments and agencies that review foreign investment for national security concerns.

The White House said the executive action was aimed at increasing the focus of CFIUS and communicating with foreign investors about its priorities and concerns. Emily Kilcrease, who works at the Office of the U.S. Trade Representative and CFIUS, said the CFIUS assessment could be a covert black box for parties under review who don’t know the confidential information the government uses to make decisions.

Outlining new priorities in the executive order can alleviate some of this disconnect, especially for new focus areas such as climate-related technologies.

source: eeworld

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Hong Kong’s South China Morning Post reported on the 28th that the US Federal Communications Commission (FCC) issued a document to the country’s rural telecom operators on the 27th, instructing the latter to apply for a US$1.9 billion “remove and replace” program subsidy.

Using the phrase “national security is threatened” by the US, he is trying to destroy Chinese firms like Huawei. The US has repeatedly accused Chinese companies’ products of security risks, but they have never produced convincing evidence.

According to reports, the program will officially begin accepting applications on October 29. In an online meeting on the 27th, the FCC announced that the country’s application window for rural telecom operators will be extended until January 14, 2022.

According to the report, when speaking of the plan, Montis, director of the FCC’s Cable Competition Bureau, still claimed: “With Huawei and ZTE (by removing their equipment and services) to mitigate existing risks, this plan still has a long way to go.”

Are Chinese firms that the US sees as a “national security threat” really a “national threat” or a power struggle between the US and China?

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Kendler, a lawyer in the Department of Justice’s national security division, will be appointed assistant secretary for export management at the Department of Commerce. The nomination must be confirmed by the Senate.

Kendler is expected to work under Alan Estevez, a former Pentagon official appointed on July 13 as undersecretary of industry and security for the Department of Commerce at the center of the US-China tech war.

The department has restricted sales to Huawei Technologies since 2019, when the company and its dozens of non-US affiliates were added to the US trade blacklist and blocked the world’s largest telecommunications equipment manufacturer.

Companies are placed on the so-called “entity list” if their actions are seen as contrary to US security or foreign policy interests.

Recently, the Biden administration has blacklisted companies for human rights abuses and high-tech surveillance in Xinjiang. Dozens of other Chinese companies on the list include surveillance manufacturers Hikvision and Dahua Technology.

US companies are prohibited from selling goods to listed companies without Department of Commerce licenses, which are hard to obtain.

The Commerce Department, which added Huawei two years ago, referred to the criminal case filed against the company in the US District Court in Brooklyn, New York, for allegedly violating US laws, including the export of goods, technology and banking services to Iran. to US sanctions.

Kendler, a litigation attorney in the Counterintelligence and Export Control Division of the Department of Justice’s Department of Homeland Security, is among the attorneys responsible for prosecuting the high-profile case that has strained ties between the United States, Canada and China.

The indictment led to the 2018 Canadian arrest of Meng, who faced bank fraud charges for allegedly misleading HSBC Holdings about Huawei’s business in Iran. The daughter of the company’s founder, Meng, has been battling extradition ever since. She said she was innocent.

Huawei denied the indictment, which was updated to include charges of stealing trade secrets.

Prior to joining the Department of Justice in 2014, Kendler served as a senior adviser in the Department of Commerce’s Office of General Counsel for Industry and Security. Before that, he was a commercial lawyer in private practice.

Source: Reuters/ec

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Despite US bans, Huawei managed to record positive growth in both revenue and net profit last year. But he thinks that the US Biden government will relax the bans so that the US supply companies do not suffer, so that the company does not have a hard time in the coming years.

Huawei Founder Ren Zhengfei also said, “We hope the new administration will accommodate a clear policy for the benefit of American companies and also for the economic development of the United States.” Ren Zhengfei said he would also welcome a phone call from Biden.

Due to the US blacklist, Huawei is unable to supply goods or technology from US-based companies. Huawei is doing its best to lift the bans, but Huawei alone is difficult to achieve. By conducting a study in the Chinese state on this issue, Huawei should support it. In the statements made by the Biden government, negative criticisms were made about China.

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Why is Donald Trump angry at Huawei?
First, why Huawei was banned by Donald Trump can easily be traced back to its nationalist and isolationist policies. Trump launched a genuine customs war that broke the historically sensitive relations between the US and China. Basically the war that ended at the beginning of 2020, when China made a commitment to buy American products for $ 200 billion within two years. It’s a victory for Trump’s policies, but this has created a clear discontent in the markets.

As we mentioned in our editorial at the time, we see reasons and mistakes on both sides in the conflict between Huawei and the United States. Chinese companies, especially Huawei, have been squeezed several times in applying anti-competitive dynamics. However, it cannot be denied that Huawei’s inclusion in the Asset List is a timing that follows a period of decline in American Apple’s sales. Do 2 + 2 to understand how Trump seized the ball to halt Huawei’s advance in the West and sold a threat to the growing Asian-centric tech market in society.

As we know, the reasons accusing Huawei (later TikTok and WeChat) of being a threat to national security were quite different. However, a serious accusation that saw no concrete evidence on the plate; However, Huawei had serious repercussions, starting with the impossibility of equipping its devices with Google services. But what will happen now?

… Or maybe not?
Assuming that relations between the US and Huawei could soften with Joe Biden at the head of the government, doubts arise about the software industry. Except for unforeseen surprises, if Huawei returns as Google’s partner, it certainly won’t happen in the short term. And in recent months, the company has focused a lot on its ecosystem consisting mainly of Huawei Mobile Services and AppGallery. Not to mention that HarmonyOS is just around the corner: the first Betas will arrive in a few weeks, and we’ll see the first smartphones to mount it by default instead of Android in 2021.

In light of that, would it make sense for Huawei to give up what it was doing and follow its steps? Maybe yes maybe no. Huawei may have prepared a plan B that allows Google to return on its devices, but this is not mandatory. Looking at the glass half full, this ban is seen as an opportunity for Huawei to take its steps back without having to rely on third parties. The sales will prove whether Huawei is right, but the negative trend in Europe should not be underestimated.

The conflict between Huawei and the US never ended
However, the arrival of Joe Biden to the US presidency does not necessarily mean a positive result for Huawei. For example, it was Biden himself who banned the use of TikTok for campaign staff in the summer of 2020. The reasons given were Trump-I, or security and privacy risks. In short, this fear seems to have taken root in the US in providing personal data to typical Asian platforms, as was the case with ByteDance’s creation. And given that every day we feed mountains of data to so many American apps, most notably Facebook and Google, that’s something that can only make you smile.

Continued Source Text: gizchina

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