Will Chinese companies still be allowed into the US critical infrastructure sector?
Last Tuesday, April 2, the US Federal Appeals Court upheld the right of the Federal Communications Commission (FCC) to ban technologies owned by Chinese telecommunications companies, albeit with small reservations, which we will mention later.
The court decision issued on April 2 confirms that the FCC acted within its authority to ban video surveillance products manufactured by Hikvision and Dahua. The commission's actions were based on the Safe Equipment Act of 2021 (SEA), which aims to neutralize the national security threat posed by telecommunications equipment available to the Chinese government.
According to this law, the FCC was instructed to stop approving the marketing and sales of telecommunications products that are considered a threat to national security. This led to the above-mentioned ban on video surveillance equipment from Hikvision and Dahua. Mostly because of concerns that it could be used by China to spy on critical US infrastructure.
However, the court agreed with the argument of the affected companies that the FCC defined the concept of critical infrastructure too broadly when introducing the ban. According to the FCC's order, the ban applies to equipment used for public safety, government agency security, physical security of critical infrastructure, and other national security purposes.
The Court pointed out that the agency's interpretation of critical infrastructure is "unduly broad and, consequently, arbitrary and capricious." The court therefore concluded that the FCC overstepped its authority by including terms from the broader presidential policy directive and CISA provisions in the definition.
The court called on the FCC to reconsider its definition of critical infrastructure, based strictly on the language set out in the 2019 National Defense Authorization Act, which prohibited federal agencies from using or buying "covered" technologies made by Chinese companies, including Hikvision and Dahua products.
Thus, Chinese companies will still not be allowed to enter the critical infrastructure of the United States, but in other areas that do not imply increased security, their paths are still open. However, it is unlikely that after years of discussions about potential Chinese surveillance, American companies will even take the risk of investing in equipment that can be urgently asked to be dismantled at any time.
Last Tuesday, April 2, the US Federal Appeals Court upheld the right of the Federal Communications Commission (FCC) to ban technologies owned by Chinese telecommunications companies, albeit with small reservations, which we will mention later.
The court decision issued on April 2 confirms that the FCC acted within its authority to ban video surveillance products manufactured by Hikvision and Dahua. The commission's actions were based on the Safe Equipment Act of 2021 (SEA), which aims to neutralize the national security threat posed by telecommunications equipment available to the Chinese government.
According to this law, the FCC was instructed to stop approving the marketing and sales of telecommunications products that are considered a threat to national security. This led to the above-mentioned ban on video surveillance equipment from Hikvision and Dahua. Mostly because of concerns that it could be used by China to spy on critical US infrastructure.
However, the court agreed with the argument of the affected companies that the FCC defined the concept of critical infrastructure too broadly when introducing the ban. According to the FCC's order, the ban applies to equipment used for public safety, government agency security, physical security of critical infrastructure, and other national security purposes.
The Court pointed out that the agency's interpretation of critical infrastructure is "unduly broad and, consequently, arbitrary and capricious." The court therefore concluded that the FCC overstepped its authority by including terms from the broader presidential policy directive and CISA provisions in the definition.
The court called on the FCC to reconsider its definition of critical infrastructure, based strictly on the language set out in the 2019 National Defense Authorization Act, which prohibited federal agencies from using or buying "covered" technologies made by Chinese companies, including Hikvision and Dahua products.
Thus, Chinese companies will still not be allowed to enter the critical infrastructure of the United States, but in other areas that do not imply increased security, their paths are still open. However, it is unlikely that after years of discussions about potential Chinese surveillance, American companies will even take the risk of investing in equipment that can be urgently asked to be dismantled at any time.
