US Senators Want Huawei Spin Off HONOR Blacklisted For National Security Concerns

Three U.S. Republican senators led by Florida Republican Senator Marco Rubio recently appealed to the Biden administration to blacklist Chinese smartphone company HONOR due to national security concerns.

Florida Republican Senator Marco Rubio. Credit: Drew Angerer | Pool | AFP via Getty Images

In his letter to U.S. Commerce Secretary Gina Raimondo, Rubio claimed that HONOR is an "arm" of the Chinese government that explouts its access to critical technologies previously denied to its previous owner, Huawei.


You may remember that the Trump administration released an executive order in May 2019 that restricted companies from doing business with Huawei due to the company's involvement in activities that pose a national security risk for the U.S.


Rubio also said in the letter that the reason behind Huawei's selling of HONOR to its new owner, Shenzhen Zhixin New Information Technology Co., was to avoid the export controls on it due to its blacklisting in the U.S. This acquisition deal allowed the Chinese government to work around a "critical American export control" despite Huawei remaining on it.

HONOR CEO George Zhao during the global launch of its Magic3 smartphone series Credit: HONOR's official YouTube Channel

"In other words, just as one of the People's Republic of China's (PRC) preeminent national champions has begun to suffer from the repercussions of its actions, Beijing has intervened to ensure that some portion of it, in the form of HONOR, remains financially viable," Rubio said in his letter.


Rubio then called out the U.S. Department of Commerce, saying that its failure to act in response to Beijing's move may set "a dangerous precedent" that may show that the U.S. lacks the capacity or willpower to penalise the obvious financial engineering of an authoritarian regime.


He then appealed to the Commerce Department to include HONOR in its Entity List.


Fellow Florida Republican Senator Rick Scott also signed Rubio's letter. Texas Republican Senator John Cornyn also added his signature in Rubio's letter.

Huawei's campus in Shenzhen, China. Credit: Huawei

A Reuters report said that Huawei declined to comment on Rubio's letter. However, the company did note a previous statement that Huawei would not hold any shares or manage HONOR after the acquisition deal between Huawei and Zhenshen Zhixin New Information Technology Co. Ltd. was finalised.


Huawei sold HONOR to Shenzhen Zhixin New Information Technology Co. Ltd. to ensure its survival during the duration of the sanctions of the U.S. In the agreement, Shenzhen Zhixin will acquire all of HONOR's business assets, while Huawei will not hold any shares of HONOR once the deal is complete.

 

Written by John Paul Joaquin

 

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