New US Rules Restricted Chinese IT To Impact 4.5m Companies

Washington Restricted Dealings With Chinese Tech Enterprises Before. Last August, It Barred Companies That Use Tech From Five Chinese Firms.

By TAISEI HOYAMA

The U.S. government will as early as next month begin requiring that corporations in America ask for permission to use information technology equipment and services from China and other countries deemed to be adversaries, a move that could affect as many as 4.5 million companies.

Regulations implemented in March let Washington review corporate purchases or usage of tech from China or other “foreign adversaries,” and block any transactions deemed too risky, with the aim of preventing leaks of sensitive information. The Commerce Department is preparing to offer licenses or pre-clearance to reduce the burden on businesses.

Washington Has Restricted Dealings With Chinese Tech Enterprises Before. Last August, It Barred Companies That Use Technology From Five Chinese Companies — including Huawei Technologies, ZTE and surveillance camera maker Hikvision — from bidding for government contracts. The new approach is far more expansive. It targets companies from countries designated as “foreign adversaries” — China, Russia, North Korea, Iran, Venezuela and Cuba. Chinese corporations are expected to form the overwhelming bulk of those under the tighter rules.

While no specific companies are named, any businesses that are “subject to the jurisdiction or direction of” these countries are covered. The rules also affect all private-sector companies operating in the U.S., not just those that work with the government. An estimated three-quarters of the roughly 6 million companies in the U.S. use foreign technology, according to the Commerce Department, including the American branch of overseas companies.

This news was originally published at Asia Nikkei.

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