A new law concerning funds given to U.S. federal agencies has been signed by President Obama, and it says that Departments of Commerce and Justice, NASA, and the National Science Foundation must consult with the FBI on whether they can acquire an information technology system “produced, manufactured or assembled by one or more entities that are owned, directed or subsidized by the People’s Republic of China.”
Only if the head of the entity involved and the FBI (or another “appropriate Federal entity”) judge that the risk of cyber-espionage or sabotage associated with the acquisition is acceptable and that the acquisition of such system is “in the national interest of the United States” the purchase will be permitted.
As it turns out, the report of the U.S. House of Representatives’ Permanent Committee on Intelligence that advised U.S. firms and the government against buying solutions from Huawei Technologies and ZTE was only the beginning.
This new law could affect many, many companies, and not just those based in China, but also those that get their supplies from or their products assembled there by entities that fall into the above mentioned category.
As a side note, the NYT reports that the impending acquisition of Sprint Nextel by Japanese SoftBank is, in part, predicated an agreement that will allow US law enforcement and national security officials to restrict their buying and using telecom equipment and systems made by Chinese-based manufacturers, especially Huawei.