US anti-authorization law ban takes effect, Huawei, ZTE and five other Chinese companies are on the list

On August 16, according to Cailian News, the U.S. government announced that the John McCain National Defense Authorization Act (NDAA) officially came into effect on August 13, local time in the United States. The regulation mainly targets federal government contracts. According to the regulations, executive agencies will be prohibited from entering, expanding or renewing contracts with entities that use any equipment, systems or services, and will also be prohibited from using the entity's telecommunications equipment or services as a substantial or necessary component of any system, or as a key technology for any system.

The formal implementation of the ban means that the United States will officially prohibit the federal government from cooperating with any contractor that uses goods or services from five companies, including Huawei, ZTE, Hytera Communications, Hikvision, and Dahua Technology. These U.S. government contractors must prove that they will not use the products or services of these five Chinese companies unless they obtain special permission.

It is understood that the ban was included in the National Defense Authorization Act (NDAA) passed throughout the year, which means that based on national security issues, government purchasers can be restricted from using federal government funds to purchase telecommunications equipment and services and video surveillance equipment from telecommunications companies included in the ban.

In response to the US's re-imposition of restrictions, Huawei said in a statement that it doubted whether this decision was in line with the US Constitution. It will continue to file lawsuits, asking the court to rule that such bans are unconstitutional and deprive citizens of their right to choose.

A Hikvision spokesperson said the company is committed to complying with the laws and regulations of the countries/regions it operates in. Hikvision "has worked hard to ensure that the security of its products meets the requirements of the US government," the spokesperson stressed.

The Secretary's Office of Dahua Technology previously responded that our share of the U.S. market is very small. We have covered 180 countries and regions globally, and our share in the U.S. is very small.

In addition, Chen Qingzhou, the founder and chairman of Hytera Communications Co., Ltd., who had previously remained silent, also accepted a media interview for the first time recently. Chen Qingzhou said that since the passage of the US NDAA government purchase ban in 2018, Hytera has been gradually reducing its business in the US government market and focusing more on the commercial market, so overall, this purchase ban will not have a particularly large impact on Hytera's sales revenue in the United States. However, the purchase ban has a significant impact on the company's potential business opportunities. Some new products and technologies, such as 5G new technologies and solutions, cannot enter the US market through government procurement.