US Senate blurs democratic principles with OK for warrantless searches

In a move which is more suited to an authoritarian state, the US Senate has voted to extend the powers of intelligence authorities to search browser history without a court warrant.

Although the amended text still has to be agreed by the House of Representatives before heading to the Oval Office to be approved by President Donald Trump, this is a blow for US citizens who should correctly crave the right to privacy.

With only 59 votes being cast in support of a clause which would remove the ability of intelligence and enforcement agencies to snoop and spy without petitioning court judges for a warrant. Such abilities were introduced during the Patriot Act, following the 9/11 attacks in the US, to fight terrorism but it seems these politicians have forgotten the very principles which they are supposed to be protecting.

Ironically, at the same time it is supposedly fighting dictatorships around the world, the US’ attitude towards remarkably similar to the Chinese Governments.

The snooping powers were granted as part of the Foreign Intelligence Surveillance Act (FISA) which expired in March. Certain aspects from this Act and Section 215 of the US Patriot Act had been slated to be included in the USA Freedom Reauthorization Act. The USA Freedom Reauthorization Act was an effort to renew numerous elements, including the ability for intelligence agencies to spy with judicial authorisation.

Despite the PR campaign in play to validate the legislation (such as ludicrous Bill names and acronyms), and efforts to increase national security, privacy rights should still be respected. Fear should not be used as a weapon to erode democratic rights.

In most democratic nations, authorities have to seek permission from the courts to workaround privacy rules, but this is not the case here. Such rules contradict the claim that Governments are working for the people and can be held accountable by the people; the process of checks and balances has been compromised.

Senator Ron Wyden of Oregon has been championing the fight against government overreach, but it seems he fell one vote short. Had 60 votes been cast in favour of the clause, privacy of the US citizens would be protected, however, his cause fell one vote short. It is not fair to blame the failure of this pro-democracy movement on a single person, but it is interesting to see who didn’t turn up to cast a vote.

There were four individuals not to show up:

Absentee votes for Amendment Number: 1583
Senator State Party
Lamar Alexander Texas Republican
Ben Sasse Nebraska Republican
Patty Murray Washington Democrat
Bernie Sanders Vermont Independent

The Republican Senators were expected to vote against the Amendment (though many defied party orders) therefore the absence of Alexander and Sasse is not a material loss. Murray, the Democratic representative of Washington was not in the capital during the vote, and neither was the anti-establishment figure of Bernie Sanders.

It does appear both Murray and Sanders have been distracted in recent weeks, enough so that inaction has sent US legislation down a worrying path.


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US introduces further rules to damage Huawei reputation

The US Energy and Commerce Committee has almost introduced rules to ban Huawei from contributing components, products or services to communications infrastructure.

The Secure and Trusted Communications Networks Act has passed through the House of Representatives and now moves onto the Senate. Although only a small proportion of Huawei’s revenues are attributable to the US, the presence of such rules will damage the reputation of the firm.

“Securing our networks from malicious foreign interference is critical to America’s wireless future,” the Committee said in a statement. “Companies like Huawei and its affiliates pose a significant threat to America’s commercial and security interests because a lot of communications providers rely heavily on their equipment.”

The Secure and Trusted Communications Networks Act builds on efforts to ensure companies from countries in conflict with the US are no-longer allowed to participate in the construction or maintenance of communications infrastructure. The language is nuanced enough to create a broad scope, though this has been directed firmly at Huawei.

As part of the Act, telcos are prohibited from using Government funds to purchase equipment from companies deemed to pose a ‘national security threat’ and requires the FCC to create a ‘rip and replace’ financial aid programme to remove components which currently exist in the network.

“This bipartisan legislation will protect our nation’s communications networks from foreign adversaries and help small and rural providers remove and replace suspect network equipment,” the statement from the Committee continues. “We look forward to swift action in the Senate so we can send this bill to the President’s desk and protect our national security.”

What we are unclear on the for the moment is the definition of ‘national security risk’.

This is where the law and politics becomes a slightly suspect beast. Grey areas are the enemy of certainly and consistency, though it becomes difficult to nail down a specific set of definitions of what or who should be considered a ‘national security risk’.

In some cases, this is blindingly obvious, though it is the others where the intersection of the law and politics becomes dangerous. A lack of clarity in definitions and rules leaves the game open for nuance and interpretation, and when you have nuance and interpretation there is a risk of abuse. Without concrete definitions, anyone or anything could be argued by an appropriately slimy politician or lawyer as a ‘national security risk’.

There should of course be rules and regulations in place to ensure civilians are not put at risk due to oversight or preference of profits over public safety, but this approach to ‘maintaining’ national security does look to be half-baked.

Huawei files defamation lawsuits in France

Huawei has filed defamation lawsuits against two individuals in France after claims that the business is controlled by the Chinese Government were aired on national television.

While these lawsuits are only coming to light now, the lawsuits were filed back in March, following interviews on television. The two individuals in question, who are remaining anonymous until the courts decide otherwise, suggested Huawei is a puppet of the Chinese Government, relating to the ownership structure and the history of founder Ren Zhengfei, who was a member of the engineering corps of the People’s Liberation Army.

Although defamation lawsuits are a very rare occurrence in the technology segment, Huawei has been taking an increasingly aggressive stance against its critics in recent months. In previous years, Huawei might have been happy to sit back, letting the hot air pass by, however 2019 has certainly seen a different strategy.

Perhaps the most notable example of this shift is the public presence of founder Ren Zhengfei. Ren has traditionally avoided the limelight though the ‘Coffee with Ren’ segments to discuss various issues and accusations directed at the firm has been regularly hitting the airwaves over the course of the year.

Alongside the more public presence of Ren, Huawei also filed a lawsuit against the US Government, suggesting it was an unconstitutional as Congress is not permitted to pass laws targeting individuals or specific companies. Although Congress did not word the National Defense Authorization Act (NDAA) to enforce a complete ban, the nuanced language made it effectively impossible for either Huawei or ZTE to do any meaningful work in the US.

There are various other examples, but it is a much more proactive defence of the business than has been seen in previous years.

Looking at the French situation, Huawei does need to be very careful. The French Government has already created a law which allows it to veto the introduction of components or products in communications infrastructure which are deemed to compromise national security. This is not a ban, Huawei is still permitted to bid for projects, though once again nuanced language has been introduced to potentially allow a ban with little/no evidence.

While the damage to Huawei’s business has been limited for the moment, it is far from in a healthy position. Many of the major European markets are yet to make a formal, and long-term, decision on Huawei’s presence in the market. France is an influential voice across the bloc, with decisions and opinions creating ripples in other European nations.

Huawei statement:

“Huawei has filed 3 complaints alleging public defamation of the company in March 2019. The complaints relate to claims that Huawei is a Chinese company controlled by state and Chinese Communist Party; that it is led by a former “counter-intelligence” member and that it uses its technological expertise in telecom networks to commit acts of espionage to the detriment of the Western world.

“Huawei believes these statements are seriously defamatory. Huawei is a private company, 100% owned by its employees. For the last 30 years since it was founded, there has never been a serious cyber-security issue with Huawei products.

“These complaints are directed against the authors of the comments and not to the media that report them. Huawei respects the independence of the media and the freedom of the press.”

US Senators suspect TikTok could be a national security threat

Republican Senator Tom Cotton and Senate Minority Leader Chuck Schumer have written to the Intelligence Community to request a national security investigation into social media video app TikTok.

Although TikTok has been paid particular attention in the request, the duo is asking other China-based applications with a significant US presence are also given some consideration. The move could represent an expansion of the aggression towards China and strain trade-talks between the two parties further.

“We write to express our concerns about TikTok, a short-form video application, and the national security risks posed by its growing use in the United States,” the pair said in the letter to Acting Director of National Intelligence Joseph Maguire.

“TikTok’s terms of service and privacy policies describe how it collects data from its users and their devices, including user content and communications, IP address, location-related data, device identifiers, cookies, metadata, and other sensitive personal information. While the company has stated that TikTok does not operate in China and stores US user data in the US, ByteDance is still required to adhere to the laws of China.”

The comments above pay homage to a Chinese law which requires Chinese companies to comply with requests from the Government and its intelligence agencies. While the law also states Chinese companies can refuse the request if it contradicts with the domestic laws in which the company operates, it is clear the US and others do not believe this clause holds much credibility or weight.

After being launched in 2017 by ByteDance, TikTok has proven to be a very successful additional to the social media scene. The app boasts more than 110 million downloads in the US alone and became the world’s most downloaded app on Apple’s App Store in the first half of 2018.

While this is the first-time politicians have waded into the waters, there has been criticism of TikTok from other avenues. US think tank Peterson Institute for International Economics described TikTok as a ‘Huawei-sized problem’, posing a national security threat to ‘the West’. The thinking here seems to be that the app collects location and biometric data and is unable to deny requests from the Chinese Government.

TikTok has proven to be an immense success in its short life, though the attention from security agencies in the US is an ominous sign. Alongside the shadow of doubt which will be cast on the app in the eyes of US citizens, it is not unfeasible for some sort of restrictions to be placed on the business.

Sources: White House holds off Huawei reprieve after China counter-punch

US suppliers are still staring into the abyss as reports emerge the US Government has halted its special-permissions programme to work with Huawei due to Chinese retaliation.

According to Bloomberg, applications for special-licenses to continue supplying Huawei with US components, products and services are currently on hold, as the US Government ponders the latest counter-move from the Chinese Government; a halt to purchases of US agricultural equipment.

Just as there was a moment to celebrate, dozens of US firms are now allegedly back to square one.

The licenses themselves have proved to be popular, with Commerce Secretary Wilbur Ross suggesting his department had received 50 applications, as of last week. This is not to say 50 companies will be given permission, the US Government has hinted the majority will be turned down, though it is back to purgatory the suppliers go.

Entry onto the Entity List has caused a significant headache for numerous parties around the world. Not only do the US suppliers have to figure out where they are going to recapture lost revenues, but potential customers in other markets have to assess the quality and resilience of the products following a disruption to the supply-chain.

Last month, Ross announced the Commerce Department would start accepting applications for licenses to receive permission to trade with Huawei. That said, no advice was offered on the criteria said applications would be measured against, aside from an ill-defined reference to national security.

What is also worth noting is the mentality of those considering the applications. Refusal would be front of mind, unless the application was compelling enough.

However, this has all been turned upside-down.

We might have been expecting retaliation from Chinese Government, though few would have assumed the White House would snap the olive branch extended to US suppliers who are losing a major customer. This is allegedly what is happening today.

This tit-for-tat trade battle has now entered the realms of finger pointing. Trump has suggested he would loosen controls on Huawei if China increased purchases of US agricultural equipment. China has stopped purchases because the noose is still firm grasped, but the US is not willing to let go because China has not ramped up its purchases.

It’s a Mexican stand-off with private companies, in both countries, feeling the pain of government posturing and flexing, as egos are massaged by enablers and yes-men looking to gain favour with short-sighted and morally-bankrupt politicians.

Looking at the collateral damage, numerous US technology companies saw share price decline following the rumours. Skyworks Solutions, where 10% of revenues are attributable to Huawei, recently reported quarterly earnings with a $127 million hole in the spreadsheets. Total revenues were 16% down in comparison to the same period of 2018, prior to the Huawei headache.

Interestingly enough, there are several companies who have publicly stated they have applied for licences. Micron and Xilinx, two US semiconductor companies, have said the license is key as their role in the supply chain can be replaced by a foreign alternative.

If the rhetoric of the trade-war is to help US companies in the long-run, the very opposite is being done with these two organisations; once they are out of the supply chain, it will be very difficult to get back in. Most likely the only way will be to renegotiate contracts at less favourable rates to convince Huawei to ditch newly found alternatives.

Google is another which will pray for the end of the trade-war and ban on supplying Huawei due to the emergence of Harmony OS, the Chinese vendors in-house OS which could be applied to smartphones and smart devices. The emergence of another contender in the OS segment could lead to Google losing real-estate on millions (if not billions) of devices for its products such as Google Play, Chrome and Google Maps.

Right now, it is difficult to see this trade-war as anything more than a battle of egos. It was supposed to counter nefarious activities of the Chinese Government, creating a platform for US companies to thrive. However, with alternatives being sought and created, the temporary damage could turn permanent very quickly.

US suppliers do not want to permanently lose a lucrative position in the supply chain of one of the worlds’ fastest growing technology companies, though that is the reality some will have to face.

US Senators start snapping Trump’s China olive branch

The President’s opponents have promised to be difficult and now they have begun the process of making it official.

A horde of Senators, led by the Republican representative of Arkansas Tom Cotton and Democrat Chris Van Hollen of Maryland, have tabled a new bill which will be known as the Defending America’s 5G Future Act. The bill aims to reinforce the Executive Order signed by Trump, prohibiting the removal of Huawei from the Commerce Department Entity List without an act of Congress.

Other Senators backing the bill include the Republican representatives of Florida and Utah, Marco Rubio and Mitt Romney, as well as Democrats from Virginia and Connecticut, Mark Warner and Richard Blumenthal.

“Huawei isn’t a normal business partner for American companies, it’s a front for the Chinese Communist Party,” said Cotton. “Our bill reinforces the president’s decision to place Huawei on a technology blacklist. American companies shouldn’t be in the business of selling our enemies the tools they’ll use to spy on Americans.”

“The best way to address the national security threat we face from China’s telecommunications companies is to draw a clear line in the sand and stop retreating every time Beijing pushes back,” said Van Hollen. “By prohibiting American companies from doing business with Huawei, we finally sent an unequivocal message that we take this threat seriously and President Trump shouldn’t be able to trade away those legitimate security concerns.”

Despite Trump’s efforts to demonstrate the power of US sanctions, it seems there are politicians who genuinely believe the Chinese threat to the US, even if Trump doesn’t. That, or they just want to be awkward.

It has appeared over the last couple of weeks that the President has only be stirring the national security pot as a means to drive China back to the trade talks table, but other politicians haven’t read the playbook; if this was a demonstration of strength, with the intention to back down one the message had been heard, things are not going to plan.

Rubio is using the argument Huawei is a front for the Chinese Government, Warner objects to the use of national security as a bargaining chip, Blumenthal has bought into the dangers of Huawei as a company and so does Romney, who is also protesting to IP theft. It should come as little surprise, Trump has done an excellent job of rousing xenophobia and fear of globalisation, there were always going to be objections when Trump climbed down off the pillar of propaganda.

Soon enough, Trump will learn he is not able to run the US like a private business. He might be one of the most powerful people in the world, but his word is not gospel; the separation of powers in US Government prevents such suspect strategies. Amazingly, despite efforts to escalate an atmosphere of discord, Trump is managing to convince Senators to reach across the aisle in opposition.

It’s a rather beautiful representation of unity.

Trump’s Huawei de-escalation plans face broad domestic opposition

President Donald Trump might be about to find out, once again, that he cannot do whatever he pleases in the Oval Office, especially when it comes to national security.

A few tweets have emerged over the last couple of days which indicate prominent Senators are going to be standing in the way of the Trump grand plan. Republican Senator Marco Rubio and Democrat Senator Chuck Schumer have both voiced opposition to Trump’s plans to let Huawei off the hook to get trade discussions with China back on track.

What Trump has done over the last couple of months is something which might have worked in the world of private business, but it does not seem to be a legitimate strategy from a politician. The President built the hype surrounding Huawei as a national security threat to impose legislation in an attempt to cripple the firm, but now wants to step back.

It seems the demonstration of power has been enough, now Trump wants to offer an olive branch to the Chinese while he seemingly has the upper-hand in the trade talks. Unfortunately, the two prominent Senators are reading from the same playbook.

Rubio and Schumer have seemingly bought into the idea of Huawei as a threat to national security, and do not believe protections of US citizens can be used as a playing card in the international game of poker Trump is attempting to mastermind.

The message from the two Senators seems to be clear here; if Huawei is a national security threat, as the President has made so clear, it remains so. Just because there is an advantage to be claimed in the political game of trade talks doesn’t change the impression of Huawei.

We suspect Trump hasn’t fully grasped the dynamics of politics. This sort of play, a demonstration of power and influence, might have worked in private industry where Trump rules with iron authority, but that is not the way politics operates. There is a separation of power, with Congress holding the White House accountable and preventing abuses of power.

This is of course not the first time this dynamic has been exposed. During the ZTE saga, Trump demonstrated the power of the US economy to the Chinese and then wanted to stand-down. Congress proved to be a difficult compatriot to Trump in this instance, and it seems it wants to do so again.

What this could mean is a return to the status quo of uncertainly and passive aggressive tariffs. If the security conscious Senators get their way, Huawei would still remain an enemy of the state and the world will return to the political purgatory which has dominated the headlines for the last 12 months. If Huawei remains in the US crosshairs, Chinese demands are not being met and we suspect trade talks with stagnate once again.

What we will leave you decide is how much of this saga is political opportunism.

Let’s say Trump doesn’t believe Huawei is a national security threat and this entire incident has been a strategy to gain greater influence in the trade talks with China, we wonder if Rubio and Schumer are simply taking advantage of the situation also. Rubio is an opponent of Trump with ambitions of representing the Republicans in the White House, while Schumer and the Democrats will want to make life as difficult for Trump wherever possible.

Perhaps we are being overly cynical. We’ll let you come to your own conclusions.

Trade deal on the cards if Trump leaves Huawei alone

For weeks and weeks there has seemed to constantly be new stories to write about the US/China trade war, and on the eve of the G20 meeting, the dynamic duo haven’t disappointed.

This week, representatives of the 20 richest countries around the world will meet in Japan to discuss everything from fishing regulations through to finance and climate change. Telecommunications, and more specifically cybersecurity, will of course be on the agenda, and most importantly, it will feature in the meeting between President Donald Trump and President Xi Jinping.

Of all the bouts over the next couple of days, this will be the one everyone is paying attention to. The leaders of the worlds’ two largest economy, duking it out to gain supremacy. Trump has said he wants a trade deal, and so has Xi. These two nations not getting on is no good for anyone, but it seems neither wants to appear as weak and concede ground.

The latest development is coming out of Beijing. Xi has stated he is open to a trade deal between the two nations, but Trump would have to stop targeting Huawei as a proxy for passive and active aggression against the Chinese Government.

This is going to be a massive ask from the Chinese premier, as while Trump is fully willing to use companies as pawns in his greatest negotiation, the supporting cast in Congress might not be as willing. We’ve already seen this during the ZTE saga.

It might seem like a lifetime ago, but it was in mid-2018 ZTE found itself in the crosshairs of the White House. Trump built up the situation, seemingly as a demonstration of the power of the Oval Office, and once the point had been made he tried to stand down. But Congress stood in the way.

26 Senators, somewhat hardliners, attempted to block the de-escalation from Trump. They seemingly bought into the evil stories told by Trump as validation for such actions and weren’t willing to let the company off the hook. Trump wanted to play a game with ZTE as movable piece, but Congress wasn’t reading the rule book.

The same situation might happen here. Opinion in the US has been directed towards Huawei being the weapon of Chinese oppression on the world, and Trump has been the most vocal when it came to hyping the fear. Even if Trump does want to step down from this position to facilitate a deal, Congress might once again prevent him.

Trump seems to have done a good job in convincing politicians of the national security threat, and Congress does not seem to have the same game-playing attitude as Trump; if something is a national security threat, it will remain one. The opportunity of commercial gain will not change that.

This is of course assuming Trump wants to make a deal. Xi has played his hand, set out his demands with Huawei, and Trump seems to be just as combative. In interviews and tweets, the President has condemned Canada for tariffs on agricultural products, slammed India for its own tariffs and suggest China’s economy is ‘going down the tubes’.

Currently we have two Presidents who do not seem like they are going to shift. In their homelands they have created personas of strength, leaning on hawkish strategies not diplomacy. It would be fair to assume a continuation of the status quo.

US officials ask for delay to Huawei ban on competition grounds – report

Deputy Director of the Office of Management and Budget Russell Vought has requested the ban on Huawei technologies be delayed by two years, sounding very similar to Huawei’s own argument.

In a letter to the White House, Vought is arguing the ban should be delayed in certain areas to ensure national security considerations and objectives can be suitably met in the new procurement landscape. Vought is currently on the clock, as rules signed into law last year are to be officially introduced in 2020. These laws would place a ban on any government funds being used to purchase Huawei products, services or components.

The issue which is currently being faced is in the procurement functions. Vought is suggesting the ban has been rushed in and would significantly reduce the number of vendors available for government agencies to work with. Interestingly enough, this is remarkably similar to the argument Huawei has been using to counter the ban. Of course, this reference would certainly not be made by the White House.

Plenty of arguments have been put forward by the under-fire Chinese firm, most recently there has been a challenge to the constitutional legitimacy of the rules, though the competition claim is one which was made back in October 2018.

At the time, Huawei suggested that banning its technologies and services in the US could hand control of the global 5G economy over to China. In a filing to the FCC, Huawei suggested the price and speed of infrastructure deployment would be impacted as competition would be reduced. This is quite a reasonable point to make as this segment of the telecom’s world is incredibly short on tier-one suppliers, or at least those which can match the quality of equipment provided and the support services which follow.

The letter from Vought is not making the exact same point, but the principle is very similar. Too many contractors rely on Huawei in their own supply chain, therefore banning Huawei would prevent any government agencies from working with these vendors. This would decrease competition for valuable contracts, potentially pushing up the price while lowering the quality of service offered.

Although the US has made its stance against China and Huawei very clear, the White House has shown on numerous occasions it is willing to be flexible with its own principles if it suits its own agenda. President Donald Trump attempted to reverse the ban on ZTE last year, once it had achieved its aims, only to face opposition in the House.

It would appear the national security argument can once again be ignored if there is too much pain is experienced by federal agencies. There seems to be little concern of the impact to private industry, see the complaints from rural telcos or those organizations where Huawei is an important customer, with these companies little more than pawns ready for sacrifice.

Perhaps we should be surprised at the consistency of hypocrisy coming out of the White House, but such are the lowly levels standards are currently being set, we are not.

Japan joins the anti-globalisation movement

It might not be as aggressive a position as the White House has entrenched itself in but limiting foreign ownership of strategic segments is a similar objection to globalisation.

According to The Telegraph, the Japanese government has identified 15 new sectors which would be restricted from foreign ownership, while restrictions on a further five would be increased. Any foreign investor wanting to take more than a 10% share of a companies listed in these segments would have to report to the Japanese government.

“…based on increasing importance of ensuring cyber security in recent years, we decided to take necessary steps, including the addition of integrated circuit manufacturing, from the standpoint of preventing as appropriate a situation that will severely affect Japan’s national security,” said a spokesperson for the Japanese government.

While telecom is already one of the sectors which has been listed for protection against foreign ownership, the new segments include mobile phone and the wider IT sector.

The rules themselves seem to be heavily nuanced to offer enough wiggle room for decision makers. At the very top level, should an investment be deemed contrary to national security, the Japanese government has granted itself the power to block or force changes to investment plans.

Although this might seem like another step on the road towards isolating China, sceptics are suggesting this is a plan to block the theft of trade-secrets by Chinese authorities and companies, it should hardly come as a surprise. After all, Japan is one of the countries the US has success in turning against China.

Last year, the Japanese government passed rules which would ban the use of phones, computers and other components from Chinese vendors in any of its agencies. Telcos have also been awarded 5G spectrum licences which come with coverage and security obligations, a move seen by some as a means to limit network exposure to Huawei. The telcos had in fact already committed to omit Huawei and ZTE from their network deployment plans, though an official position is a much stronger symbolic gesture.

There might be genuine security and economic concerns about China and its telco flagbearers, but the world is increasingly moving away from the concepts of openness. This announcement might only be a pebble in the global pond, but each pebble adds to the growing waves of isolationism.