The NETWORKS Act aims to safeguard U.S. national security by imposing sanctions on foreign entities involved in economic or industrial espionage through 5G and future telecommunications technology.
Chrissy Houlahan
Representative
PA-6
The NETWORKS Act aims to safeguard U.S. national security by imposing sanctions on foreign entities involved in economic or industrial espionage through 5G and future telecommunications technologies. It mandates the President to block transactions of foreign individuals or companies producing 5G technology that threatens U.S. security, with exceptions for intelligence activities, humanitarian aid, and certain essential goods. The President can waive sanctions for national security reasons, subject to Congressional notification, and violators will face penalties under the International Emergency Economic Powers Act. This act defines key terms and specifies that sanctions do not apply to participation in international standards-setting bodies or transactions involving existing 3G or 4G networks.
NETWORKS Act: New Sanctions to Hit Foreign Tech Firms Over 5G Espionage
The "Neutralizing Emerging Threats from Wireless OEMs Receiving direction from Kleptocracies and Surveillance states Act," or NETWORKS Act, aims to beef up U.S. national security by slapping sanctions on foreign companies caught spying through 5G and future-gen telecom tech. Basically, if a foreign company is using its 5G tech to steal economic or industrial secrets, the President gets the power to block their major financial moves in the U.S (Section 3).
Blocking the Spies
This bill targets foreign entities (companies or individuals) that are producing 5G tech and using it in ways that threaten U.S. national security (Section 3). Think of a Chinese telecom giant caught embedding spyware in their equipment sold to American businesses – that’s the kind of scenario this bill is designed to address. The President can freeze assets and prohibit significant transactions, making it harder for these companies to operate here. For example, if a company like Huawei were found to be engaging in espionage through its 5G infrastructure, the U.S. could block its access to American banks and financial systems.
The Fine Print
There are some important exceptions. The bill doesn’t apply to U.S. intelligence operations (so our spies can keep spying). It also makes exceptions for sales of food, medicine, and humanitarian aid (Section 3). If, say, a sanctioned company also provides medical equipment, those transactions would still be allowed. Plus, the President can waive these sanctions for 90 days at a time if it's deemed vital to national security, but they have to tell Congress why (Section 3). This could come into play if a key ally needs access to certain technology from a sanctioned company.
What Counts as "Significant?"
One key thing: the bill leaves it up to the President to decide what counts as a "significant" transaction (Section 3). This means the impact could vary depending on who's in office. A transaction that one administration considers significant might be overlooked by another. It also doesn't apply to companies just participating in international standards-setting bodies or dealing with older 3G/4G networks. So, attending a conference to discuss 6G standards? You're good. Spying through your 5G network? Not so much.
Real-World Impact
This bill is all about protecting the backbone of our digital economy. With 5G promising to connect everything from self-driving cars to smart factories, the stakes are high. If a foreign power can compromise that network, they could potentially disrupt critical infrastructure, steal valuable data, or even spy on military communications. The NETWORKS Act is a shot across the bow, signaling that the U.S. is serious about cracking down on this kind of threat. The bill's broad language and the President's wide discretion, however, could also mean significant impacts on global tech markets and international relations, depending on how it's enforced.