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US funding bill slips in 'cyber-espionage' IT purchase check

updated 07:50 pm EDT, Wed March 27, 2013

Consultation required prior to purchases from Chinese firms

As part of the funding law signed this week by President Barack Obama, Congress has included a provision for a formal assessment of "cyber-espionage or sabotage" risk when considering buying information technology systems from a company "owned, directed, or subsidized" by China. The requirement mandates consultation with law enforcement and other assessors prior to purchase, during the evaluation process.

A congressional aide told Reuters that the provision's goal "is not to hurt American and European companies that have operations in China. It was really targeting entities that are directed by Beijing."

"It's a helpful reminder to look at the supply chain" of US firms, the aide said. "The cheap option may be artificially lowered because potentially there are ulterior motives."

The insertion likely is fallout from a Congressional report published in October that leading Chinese telecoms producers Huawei and ZTE should be locked out of the US market over security concerns, reports Reuters. The US House of Representatives' Intelligence Committee argued that the two companies are subject to the influence of the Chinese government. After 11 months of research, the committee reported that it is in the best interests of US. firms and the country to avoid purchasing products from either Huawei or ZTE.

According to a report last year from the Congressional Research Service, the US imports $129 billion annually of information technology products from China, but not all is purchased by branches of government.



By Electronista Staff
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