The NETWORKS Act would authorize the U.S. President to impose sanctions under the International Emergency Economic Powers Act on foreign telecommunications companies that produce fifth-generation (5G) or future-generation tech and conduct business in ways deemed contrary to U.S. national security. Starting 90 days after enactment, the President could block and prohibit significant financial transactions involving such foreign persons and their property when those items are in or come into U.S. jurisdiction or the hands of U.S. persons. The bill includes important exceptions (for intelligence activities and humanitarian aid), a waiver mechanism (renewable up to 90 days), and broad “significance” criteria to determine which transactions are sanctionable. Definitions clarify who is covered and how “untrusted” vendors are identified. The act frames the issue as part of a broader effort to secure U.S. communications networks and use economic tools to counter espionage and other threats from certain countries, notably the PRC.
Key Points
- 1Purpose and scope
- 2- Targets foreign telecommunications companies that produce 5G or future-generation tech and act in ways that threaten U.S. national security.
- 3- Uses sanctions powers to block significant transactions involving the property of such foreign persons when that property is in or accessible to the United States or U.S. persons.
- 4Timing and authority
- 5- Takes effect 90 days after enactment, with the President empowered to use IEEPA authorities to implement sanctions.
- 6Exceptions
- 7- Does not apply to U.S. intelligence activities or reporting required by, or conducted under, the National Security Act.
- 8- Allows humanitarian exemptions for agriculture/food/medicine/medical devices, humanitarian aid, and related financial and logistical activities.
- 9Waiver
- 10- The President can grant short-term waivers (up to 90 days each) if needed for national security reasons, with a congressional report requirement.
- 11Implementation and penalties
- 12- President implements sanctions under IEEPA sections 203 and 205.
- 13- Violations carry penalties equal to those for other prohibited IEEPA activities.
- 14Definitions and scope
- 15- Fifth or future generation telecommunications technology: 5G and beyond.
- 16- Foreign person: anyone not a U.S. person.
- 17- U.S. person: U.S. citizens, permanent residents, or entities organized under U.S. law (including foreign branches).
- 18- Untrusted telecommunications vendor: defined by reference to a specific term in the Secure and Trusted Communications Network Act of 2019.
- 19- Knowledge standard: “knowingly” means actual knowledge or reasonable awareness of the conduct or result.
- 20Significance and rules of construction
- 21- The President may consider a range of facts to decide if a transaction is significant (using criteria similar to certain federal regulations).
- 22- Transactions shall not be construed to ban participation in international standard-setting bodies or affect existing 3G/4G networks.