Top Intel Dem praises sanctions on Chinese telecom giant

The top Democrat on the House Intelligence Committee praised the Obama administration’s decision to impose export restrictions on China’s ZTE, one of the country’s top telecommunications equipment manufacturers.

Rep. Adam Schiff (D-Calif.) on Monday said the move could help curb Beijing’s extensive cyber espionage campaign, long believed to be aided by China’s biggest companies.

{mosads}“We hope this sends a strong message to ZTE, to China and to other Chinese telecommunications companies who present serious national security risks not only by evading export controls, but by purposefully compromising supply chain security,” Schiff said in a statement.

The Commerce Department did not specifically cite surveillance concerns in its public notice but said it was slapping restrictions on ZTE because of an alleged scheme to re-export items to Iran in violation of U.S. law.

Commerce pointed to ZTE documents revealing a plan to use shell companies to evade export controls.

The restrictions will make it more difficult for ZTE to acquire U.S. hardware. The Wall Street Journal reported ZTE likely relies on U.S. chipsets to manufacture its products, including mobile phones, routers and telecom software systems.

Chinese officials expressed frustration over the sanctions.

“China is opposed to the U.S. citing domestic laws to place sanctions on Chinese enterprises,” Chinese Foreign Ministry spokesman Hong Lei told a daily news briefing, according to Reuters.

Security experts have long been fearful that digital adversaries like China are using the tech supply chain to infiltrate critical U.S. networks.

The House Intelligence Committee in 2012 released a report that specifically investigated ZTE and Huawei, another top Chinese telecom equipment maker.

“To the extent these companies are influenced by the state, or provide Chinese intelligence services access to telecommunication networks, the opportunity exists for further economic and foreign espionage by a foreign nation-state already known to be a major perpetrator of cyber espionage,” the report concluded.

Schiff on Monday said these findings “sounded the alarm on the counterintelligence and security risks ZTE and other Chinese telecommunication companies doing business in the United States pose.”