Amid the ongoing US-China trade war, the U.S. government has been putting new sanctions on Huawei since effectively banning the company in May last year after it was put on the Entity List.
Now, a report coming from Nikkei claims that the United States will be imposing a ban for federal procurement from businesses that use products from Huawei Technologies and four other China-based companies over security concerns.
U.S. agencies will not be able to sign or renew contracts with companies that use products or services from Huawei, ZTE, Hangzhou Hikvision Digital Technology, Zhejiang Dahua Technology, and Hytera Communications.
The new regulations, which go into effect from 13th August, will require companies bidding for the federal contracts to certify that they do not use banned products from the above mentioned Chinese companies.
The move will reportedly affect more than 800 Japanese companies, which include U.S. subsidiaries that have direct federal contracts as well as Japan-based enterprises that deal with American forces stationed in the Asian country.
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It remains unclear how the United States government is defining the “use” of products. There’s also a possibility that the ban may soon be expanded to cover affiliates, subsidiaries, and parents of contractors.
The companies have two choices — either do business with the U.S. government or with the major suppliers. So far, it seems that companies are choosing to continue doing business with the United States.
Companies like Nippon Telegraph & Telephone, NTT Data, SoftBank Group, and Kajima have said that they will ensure compliance with this new regulation and will refrain from using products and services from the likes of Huawei and ZTE.
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