Countering Untrusted Telecommunications Abroad Act

Madam Speaker, I rise, along with Republican Members of the Financial Services Committee, Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets--Rep. Bill Huizenga, Rep. French Hill, Rep. Tom Emmer, Rep. Alexander X. Mooney, Rep. Warren Davidson, Rep. Trey Hollingsworth, Rep. Anthony Gonzalez, Rep. Bryan Steil and Rep. Van Taylor, to express our serious concerns with H.R. 8520, the Countering Untrusted Telecommunications Abroad Act. Although this bill was referred to the Financial Services Committee, the referral was waived without understanding the bill's impact on U.S. capital markets.

We believe that H.R. 8520 implicates securities disclosure obligations in a way that runs counter to our existing principles-based disclosure framework. As such, H.R. 8520 risks setting a precedent in support of policies that run counter to our free-market principles and are harmful to the competitiveness of U.S. capital markets.

In particular, we are concerned that H.R. 8520 requires publicly traded companies to make certain disclosures to the Securities and Exchange Commission to advance foreign policy and national security objectives. As we have stated on several previous occasions this is ineffective. Sanctioning is the most effective way to achieve foreign policy and national security objectives--not our securities laws.

Hijacking U.S. investment disclosure rules to accomplish extraneous policy goals compromises the strength of American capital markets, disincentivizes companies from going or remaining public by increasing compliance costs and reduces investment opportunities for retail investors and retirement savers. Moreover, the SEC is not the appropriate entity for advancing our Nation's national security or foreign policy agenda. Such issues should be handled by agencies with expertise in overseeing more effective tools like sanctions and export controls.

Similarly, H.R. 8520 inappropriately considers all information of a certain kind ``material,'' in this case information related to contracts for--or usage of--telecommunications equipment or services from certain providers. Currently, under the Securities Exchange Act of 1934, public companies are required to file annual reports with the SEC that are made public to disclose company information that investors would find material to making investment decisions. It is not Congress' job to tell public companies what information is and is not material. Instead, it is up to the individual company to make that determination on its own. Otherwise, companies will be forced to increase costs and regulatory risks to comply with disclosure obligations that do not materially influence investment decisions.

Moreover, this bill is mandating compliance with a disclosure regime that requires disclosing information that is likely unknowable. Specifically, the bill requires that publicly traded companies disclose if they or ``any affiliate'' used or entered into contracts to use covered telecommunications equipment or services. Inexplicably, the bill does not define ``any affiliate.'' Still, in many instances, it will be impossible for many companies to know whether their affiliates contracted for or used such services. To make matters worse, when companies attempt to disclose this impossible-to-discern information in a manner that later turns out to be mistaken, they would be liable for securities fraud.

The flawed approach set forth in this bill sets a dangerous precedent. H.R. 8520 should have been marked up in the Financial Services Committee prior to floor consideration in order to fully debate the policy implications. Ultimately, this bill will limit choices for everyday investors, encourage public companies to go private, and weaken the health of U.S. public markets.

For these reasons, we oppose H.R. 8520.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 8520) to establish certain reporting and other requirements relating to telecommunications equipment and services produced or provided by certain entities, and for other purposes, as amended.

Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days in which to revise and extend their remarks and include extraneous material on H.R. 8520.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise today in support of H.R. 8520, the Countering Untrusted Telecommunications Act.

Imagine the following: A senior official for a NATO ally of the United States transmits a vital national security matter to his country's embassy here in Washington, but before the call even reaches the embassy, it is intercepted by Chinese spyware, which transmits the call to Beijing. Before our officials even hear the top-secret message, CCP officials have captured and recorded the information.

Threats like this are very real and on the rise. Even here in the United States, intelligence and defense officials are concerned that telecommunications equipment made by the company Huawei could capture communications about our nuclear arsenal.

Around the world, the problem is worse. Many of our partners and allies have all of their major cell phone networks backed by unsafe equipment giving the PRC and its friends backdoor access to our private communications. Many countries, replete with this unsafe equipment, have mutual defense treaties with the United States.

The Countering Untrusted Telecommunications Act would be a crucial tool to address these security issues.

First, it would require the State Department to ensure that the Department itself is not relying on unsafe equipment at our embassies around the world.

Second, it would require a comprehensive report on the telecommunications security of all countries with which the United States has a mutual defense treaty.

Third, it authorizes our State Department to provide diplomatic support for telecommunications projects and pushes our United States Trade and Development Agency to finance important projects in this area.

Finally, it requires mobile network operators listed on American stock exchanges to disclose whether they have Huawei, ZTE, or other unsafe equipment in their networks. Currently, many network operators fail to disclose this information despite existing sanctions against Huawei. This provision would be beneficial for our national security but also crucial for investors and shareholders in these companies.

I thank Representatives Wild and Wagner for their important work on this bill, and I urge all of my colleagues to join me in supporting this legislation.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I am prepared to close, and I yield myself the balance of my time.

Mr. Speaker, H.R. 8520, the Countering Untrusted Telecommunications Act is an important initiative in finding and addressing American vulnerabilities to cyber spying and espionage, particularly in our communications with partners and allies whose unsecure networks may provide backdoor access to these increasing threats.

I, once again, thank Representatives Wild and Wagner for their tremendous work in advancing this bill and their commitment to protecting our national security from cyber and security threats. I hope my colleagues will join us in supporting this bill.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I rise in support of this bill, and I yield myself such time as I may consume.

Mr. Speaker, the Countering Untrusted Telecommunications Abroad Act requires the State Department to conduct a report on the presence and risks posed by any Chinese telecommunications vendor like Huawei or ZTE in the networks of defense-allied countries.

It also requires the General Accountability Office, or GAO, to report on Chinese and Russian telecom suppliers serving U.S. embassies overseas.

Finally, it tasks the State Department with identifying telecom infrastructure projects that will strengthen U.S. national security, and with helping countries currently being serviced by Chinese vendors to build capacity for replacing those vendors.

I would hope by now that most U.S. officials understand the threats to U.S. national security posed by tech companies controlled by the Chinese Communist Party, like Huawei. But we must also ensure that our allies and partners are not duped by the seemingly low cost of telecom services provided by state-backed countries. While seemingly cheap, the real cost lies in giving the CCP control over all of your telecommunications data, which they will use to spread their malign influence globally.

So I support the bill strongly, and I yield back the balance of my time.

Mr. Speaker, on rollcall No. 443, I mistakenly voted ``nay'' when I intended to vote ``yea.''

members recorded pursuant to house resolution 8, 117th congress

Baird (Bucshon)

Bass (Correa)

Boebert (Gaetz)

Chu (Beyer)

Conway (Valadao)

Garcia (IL) (Correa)

Gomez (Evans)

Gottheimer (Neguse)

Johnson (TX) (Jeffries)

Jones (Beyer)

Kirkpatrick (Pallone)

Lamb (Pallone)

Lawrence (Stevens)

McEachin (Beyer)

McHenry (Donalds)

Meng (Escobar)

Napolitano (Correa)

Newman (Beyer)

Palazzo (Fleischmann)

Ruiz (Correa)

Rush (Bowman)

Ryan (OH) (Correa)

Sanchez (Pallone)

Soto (Wasserman Schultz)

Swalwell (Correa)

Vargas (Correa)

Waltz (Gimenez)

Mr. Speaker, pursuant to section 2 of House Resolution 1361, I move to suspend the rules and pass the bills: H.R. 1433, H.R. 4009, H.R. 4358, H.R. 6265, H.R. 6846, H.R. 7240, H.R. 7338, H.R. 8453, H.R. 8503, and H.R. 8520; and agree to H. Res. 558.