White House ‘strongly objects’ to Senate defense bill’s ZTE provision

The White House on Tuesday said it “strongly objects” to a provision in the Senate-passed version of the annual defense policy bill that seeks to block President Trump’s deal to revive Chinese telecommunications giant ZTE.

Still, the statement did not include a veto threat, using language similar to the administration’s statement on the House-passed version of the National Defense Authorization Act (NDAA) that the administration “supports ultimate passage of an NDAA for the 57th consecutive year.”

“The administration strongly objects to section 6702, as it would disturb the traditional allocation of powers between the legislative and executive branches,” the statement said. “The provision undermines the very purpose of the relevant export control regulations—which is to coerce non-compliant parties to stop engaging in behavior contrary to the national security interests of the United States.”

The objection was issued as part of a broader, 12-page statement of administration policy on the Senate’s NDAA, which passed last week with a veto-proof 85-10 vote.

The provision at issue keeps in place penalties that were levied on ZTE after it admitted violating sanctions on Iran and North Korea. It was added to the Senate’s NDDA after Commerce Department announced it had agreed to lift the penalties against ZTE in exchange for the company paying a $1 billion fine and embedding a U.S.-selected compliance team into the firm.

In its statement, the White House argued the Senate’s move would negate incentives for companies like to ZTE come into compliance with U.S. law.

“A statutory bar on relief would eliminate key incentives for ZTE or any other company to come into compliance with U.S. export controls, even if it is in the national security interest of the United States to maintain these incentives,” the statement said.

The Senate version must still be reconciled with the House version, which does not include the ZTE provision.

Both bills would ban the government from contracting with ZTE or Huawei, another Chinese telecommunications company. Tuesday’s statement said the administration would support such a ban, “but in a way that provides flexibility in implementation to maintain the ability of executive departments and agencies to accomplish their missions.”

The Senate language “fails to adequately address unintended consequences of such a broad prohibition and the loopholes that would remain, and the administration looks forward to addressing these concerns with the Congress,” the statement continued.

Outside of ZTE, the White House also said it “strongly objects” to a provision that seeks to restrain U.S. support to the Saudi Arabia-led coalition in Yemen.

The provision would require certification that the Saudi coalition, which has been for the majority of civilian deaths in the civil war, is meeting certain criteria before the U.S. can refuel Saudi and coalition aircraft.

“The administration shares the concern of the Congress regarding the humanitarian situation in Yemen,” the statement said. “Section 1266 inaccurately implies, however, that the Saudi-led coalition is the only party to the conflict whose actions have resulted in the dire humanitarian situation in Yemen. The provision fails to address material support the Government of Iran has provided to the Houthis in order to foment the conflict in Yemen in opposition to the Yemeni government.” 

The statement also objected to a ban on China’s participating in the annual Rim of the Pacific naval exercises. The administration uninvited China to this year’s drill. But, the statement argued, China’s participation may be appropriator in other years, depending on “numerous other factors.”

“Section 1245 would place restrictions on the secretary of Defense’s ability to manage a strategic relationship in the context of competition, limiting DOD’s options on China and ability to act in the national security interest of the United States,” the statement said.

Other objections include the bill’s end strength levels, which would allow 8,639 fewer active duty troops than the administration requested; provisions requiring the Missile Defense Agency to develop sensor and intercept layers; and the lack of authorization to build a new high-value detention facility at Guantanamo Bay to replace the aging one already there.

The statement also said the administration is “disappointed” the bill does not include 4,000 special immigrant visas for Afghans who have helped the U.S. military.

“Without allocating additional visas,” the statement said, “there will be no authority to fully address the current pipeline of eligible individuals estimated at approximately 16,700 or any further eligible individuals who apply before the December 2020 deadline.”