America designates Chinese telecom companies 'Huawei' and 'ZTE' national security threats

Washington D.C [U.S], June 30 : The Federal Communications Commission on Tuesday designated Huawei Technologies Co. and ZTE Corp, as well as their parents, affiliates and subsidiaries as national security threats, saying they have close ties with the Chinese Communist Party and China's military apparatus.
"With today's orders and based on the overwhelming weight of evidence, the Bureau has designated Huawei and ZTE as national security risks to America's communications networks -- and to our 5G future," FCC Chairman Ajit Pai said in a statement.
"Both companies have close ties to the Chinese Communist Party and China's military apparatus, and both companies are broadly subject to Chinese law obligating them to cooperate with the country's intelligence services," the statement said.
As a result of the action, government subsidy money from the FCC's $8.3 billion Universal Service Fund can no longer be used by American telecommunications providers to purchase and install equipment and services from Huawei and ZTE companies for their networks.
The FCC voted unanimously to block telecoms from using federal funds to purchase equipment from Huawei last November, but the final order went into effect Tuesday.
"We cannot and will not allow the Chinese Communist Party to exploit network vulnerabilities and compromise our critical communications infrastructure," the FCC statement said.
Tuesday's order formalises the proposal by FCC last November to designate the telecoms as a national security threat.