NETWORKS Act

Bill Number

H.R. 1795

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

International Affairs

Status

Introduced

Latest Action

2025-03-03: Referred to the House Committee on Foreign Affairs.

Last Updated

2025-07-01T08:05:23Z

AI-Generated Summary

Purpose of the Legislation

The NETWORKS Act (H.R. 1795) aims to protect U.S. national security by imposing economic sanctions on foreign telecommunications companies involved in economic or industrial espionage—activities like stealing trade secrets or sensitive information—against U.S. persons. It emphasizes the importance of secure telecom networks and seeks to counter risks from untrusted vendors, particularly those linked to adversarial nations, using tools like financial restrictions to promote safer global communications infrastructure.

Key Provisions Outlined

• Sense of Congress: Declares that secure telecom networks are vital for U.S. national security, both at home and in allied countries; highlights risks from untrusted vendors (e.g., those based in China) that outweigh any benefits; and urges the use of economic measures to encourage secure networks.
• Sanctions Imposition: Starting 90 days after enactment, the President must use powers under the International Emergency Economic Powers Act (IEEPA)—a law allowing the executive branch to regulate international economic transactions during emergencies—to block and prohibit significant transactions involving property or interests of targeted foreign persons. These include companies that:
• Produce fifth-generation (5G) or future-generation telecom technology.
• Conduct business in ways that harm U.S. national security interests, such as espionage.
• Exceptions:
• Does not apply to U.S. intelligence activities or reporting under the National Security Act.
• Exempts transactions related to humanitarian aid, including food, medicine, medical devices, and necessary transport or financial support for such aid.
• Waiver Authority: The President can temporarily waive sanctions (up to 90 days, renewable) if they are deemed essential to U.S. national security, with a report to Congress required.
• Implementation and Enforcement:
• Relies on IEEPA sections for carrying out sanctions.
• Violations (including attempts, conspiracies, or causing violations) face penalties under IEEPA, such as fines or imprisonment.
• Definitions:
• "Fifth or future generation telecommunications technology": Industry-standard 5G or advanced wireless tech.
• "Foreign person": Any individual or entity that is not a U.S. person (U.S. citizens, permanent residents, or U.S.-organized entities).
• "Knowingly": Having actual knowledge or reason to know of the issue.
• "Untrusted telecommunications vendor": Refers to equipment or services deemed risky under the 2019 Secure and Trusted Communications Networks Act.
• Additional Rules: Sanctions consider the overall context to determine if transactions are "significant." They exclude participation in international standards-setting bodies or dealings with existing third- or fourth-generation (3G/4G) networks.

Significant Changes to Existing Law

• Expands IEEPA's application to specifically target foreign telecom firms involved in espionage, adding a focused mechanism beyond general emergency powers.
• Introduces tailored criteria for sanctions based on 5G+ technology production and national security threats, building on but not directly amending prior laws like the 2019 Secure and Trusted Communications Networks Act (which bans risky equipment in U.S. networks).
• Provides explicit exceptions for humanitarian aid and intelligence, which were not previously detailed for this context, and allows short-term waivers with congressional oversight to balance enforcement with flexibility.

Potential Impacts

• Government Agencies: The executive branch (e.g., Treasury and State Departments) will need to identify and sanction targets, monitor compliance, and handle waivers, potentially increasing administrative workload and coordination with intelligence agencies.
• Citizens and Businesses: U.S. persons (individuals or companies) gain protection from espionage via blocked transactions, enhancing data and network security; however, it could disrupt supply chains if U.S. firms rely on affected foreign tech.
• International Relations: May strain ties with countries hosting targeted companies (e.g., China), but could strengthen alliances by promoting secure networks among partners; risks retaliatory trade measures or barriers to global 5G standards.

Main Stakeholders Affected

• U.S. Government: Executive agencies enforcing sanctions; Congress receiving waiver reports.
• Foreign Telecommunications Companies: Especially producers of 5G+ equipment (e.g., those from China or surveillance-linked states) deemed threats, facing asset freezes and transaction bans.
• U.S. Persons: Citizens, residents, and U.S.-based entities protected from espionage but potentially impacted by restricted global business dealings.
• Allied Nations and International Partners: Benefit from encouraged secure networks but may face pressure to align with U.S. standards in telecom procurement.
• Humanitarian Organizations: Largely unaffected due to exemptions, ensuring aid flows continue uninterrupted.

Notable Legal, Constitutional, or Political Implications

• Legal: Relies on IEEPA's broad executive authority, which has been upheld in courts for national security but could face challenges if waivers or determinations are seen as arbitrary; ensures due process through defined criteria and penalties.
• Constitutional: Aligns with Congress's power to regulate foreign commerce and declare war-related measures, while delegating implementation to the President with oversight (e.g., reports), avoiding separation-of-powers issues.
• Political: Signals bipartisan concern over telecom vulnerabilities (introduced by Reps. Houlahan and Strong), potentially escalating U.S.-China tech rivalry; promotes "economic statecraft" as a non-military tool, but waivers could spark debates on consistency in enforcement.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Houlahan, Chrissy [D-PA-6]

Cosponsors (3)

Rep. Strong, Dale W. [R-AL-5], Rep. Nunn, Zachary [R-IA-3], Rep. Fitzpatrick, Brian K. [R-PA-1]

Recent Actions

• 2025-03-03: Referred to the House Committee on Foreign Affairs.
• 2025-03-03: Introduced in House
• 2025-03-03: Introduced in House

Bill Versions

• Neutralizing Emerging Threats from Wireless OEMs Receiving direction from Kleptocracies and Surveillance states Act — issued 2025-03-03 — PDF (7 pages)