FCC adds Russia’s Kaspersky & China telecom firms to national security threat list

 – Summary – 

  • Sanctioned by FCC March 25, 2022: AO Kaspersky Lab, China Telecom (Americas) Corp [0728.HK], China Mobile International USA [0941.HK]
  • Previously Sanctioned by FCC: Huawei Technologies Co [HWT.UL], ZTE Corp [000063.SZ], China Telecom Americas (U.S. auth revoked in October 2021), Pacific Networks (U.S. auth revoked Mar 17, 2022), ComNet (U.S. auth revoked Mar 17, 2022), China Unicom [0762.HK] (Jan 2022)

The Federal Communications Commission (FCC) has added Russia’s AO Kaspersky Lab, China Telecom (Americas) Corp (0728.HK) and China Mobile International USA (0941.HK) to its list of communications equipment and service providers deemed threats to U.S. national security.

The regulator last year designated five Chinese companies including Huawei Technologies Co (HWT.UL) and ZTE Corp (000063.SZ) as the first firms on the list, which was mandated under a 2019 law. Kaspersky is the first Russian company listed.

FCC Commissioner Brendan Carr said the new designations “will help secure our networks from threats posed by Chinese and Russian state-backed entities seeking to engage in espionage and otherwise harm America’s interests.”

U.S. officials have long said that running Kaspersky software could open American networks to malign activity from Moscow and banned Kaspersky’s flagship antivirus product from federal networks in 2017. Moscow-based Kaspersky has consistently denied being a tool of the Russian government.

In naming Kaspersky, the FCC announcement did not cite Russia’s invasion of Ukraine or recent warnings by President Joe Biden of potential cyberattacks by Russia in response to U.S. sanctions and support of Ukraine.

Kaspersky said in a statement it was disappointed in the FCC decision, arguing it was “made on political grounds.” The move was “unsubstantiated and is a response to the geopolitical climate rather than a comprehensive evaluation of the integrity of Kaspersky’s products and services,” the company said.

The Chinese Embassy in Washington and the Chinese companies did not immediately comment. The Chinese commerce ministry earlier this month criticized FCC actions and said China would adopt measures necessary to safeguard the legitimate rights of its firms.

In October, the FCC revoked the U.S. authorization for China Telecom (Americas), saying it “is subject to exploitation, influence and control by the Chinese government.” The company failed to persuade a U.S. court to reverse the decision.

The FCC cited its prior decisions to deny or revoke the Chinese telecom companies ability to operate in United States in its decision to add them to the threat list.

The FCC also revoked the U.S. authorizations of China Unicom (0762.HK) and Pacific Networks and its wholly owned subsidiary ComNet.

In 2019, the FCC rejected China Mobile’s bid to provide U.S. telecommunications services, citing national security risks.

Being included on the “covered list” means money from the FCC’s $8 billion annual Universal Service Fund may not be used to purchase or maintain products from the companies. The fund supports telecommunications for rural areas, low-income consumers and facilities such as schools, libraries and hospitals.

The FCC last year also named Hytera Communications (002583.SZ), Hangzhou Hikvision Digital Technology (002415.SZ) and Dahua Technology (002236.SZ) as security threats.

FCC Chair Jessica Rosenworcel said the agency worked closely with U.S. national security agencies to update the list and will add additional companies if warranted. 

Reuters March 17, 2022
Reuters March 25, 2022