Defense Department also designates China Mobile and China Telecom as being backed by the People's Liberation Army.
Huawei is owned or controlled by the Chinese military, Reuters reported Wednesday, citing an internal document from the US Defense Department. The Trump administration sent a document to Congress containing the names of 20 Chinese companies that it found to be backed by the People's Liberation Army.
The designation by the Pentagon enables the president to declare a national emergency and then penalize the companies on the list with sanctions if they operate in the US. As well as Huawei, Axios said the list includes China Mobile Communications Group, China Telecommunications and Hikvision Digital Technology.
The list was confirmed by a senior administration official, and Jonathan Rath Hoffman, assistant to the Secretary of Defense for Public Affairs, confirmed that the Department of Defense produced a list of "communist Chinese military companies" in accordance with Section 1237 of the National Defense Authorization Act. The list contains entities owned or controlled by, or affiliated with, the Chinese government, military or defense industry.
"As the People's Republic of China attempts to blur the lines between civil and military sectors, 'knowing your supplier' is critical," Hoffman said in an emailed statement. "This list will be a useful tool for the US government, companies, investors, academic institutions and likeminded partners to conduct due diligence with regard to partnerships with these entities."
Hikvision accused the US of misapplying "a never-used provision of a 21-year-old law."
"Not only is Hikvision not a 'Chinese military company,' Hikvision has never participated in any R&D work for military applications," Hikvision said in a statement. "Hikvision has always tried to fully and transparently cooperate with the US government to answer questions and correct misunderstandings about the company. Hikvision will continue to try to work with the US government to resolve all of these matters."
Huawei, China Mobile and China Telecom and didn't respond to a request for comment.
The news follows the CIA reportedly accusing Huawei of receiving funding from China's National Security Commission, the People's Liberation Army, and a third branch of the Chinese state intelligence network over a year ago.
Huawei was blacklisted in May when it was added to the United States' "entity list" (PDF). In addition, US President Donald Trump at the same time signed an executive order essentially banning the company in light of national security concerns that Huawei had close ties with the Chinese government. Huawei has repeatedly denied that charge.