Duval Times

Sen. Rick Scott Calls on Biden-Harris Admin to Crack Down on Chinese Companies’ ‘Rebranding’ Efforts to Circumvent U.S. Laws

Aug 23, 2024

WASHINGTON, D.C. – This week, Senator Rick Scott sent a letter to Secretary of Commerce Gina Raimondo and Treasury Secretary Janet Yellen expressing concerns following reports that Chinese companies are exploiting legal loopholes by rebranding and reestablishing with a U.S.-based façade to circumvent certain regulations, restrictions, and sanctions. In his letter, Senator Scott calls on the administration officials to take decisive action against these companies and make changes necessary to prevent dangerous Chinese Communist Party-backed companies from exploiting U.S. markets and compromising national security.

Read the full letter HERE or below.

Dear Secretary Raimondo and Secretary Yellen:

I am writing to express my serious concerns regarding the recent revelations about Chinese companies rebranding and establishing U.S.-domiciled businesses to circumvent regulatory scrutiny, including sanctions or other prohibitions, and continue their operations in the United States. This alarming trend poses significant risks to our national security and economic sovereignty.

As detailed in recent reports, Chinese firms such as Hesai Group have been exploiting legal loopholes to rebrand themselves under new names like "American Lidar" and establish subsidiaries in the U.S. heartland. These maneuvers are designed to evade restrictions on Chinese military entities operating in the U.S. This deceptive practice not only undermines our regulatory frameworks but also jeopardizes the safety and privacy of American citizens. And all the while is misleading to investors and business partners.

The U.S. Department of Defense's previous designation of Hesai as a Chinese military entity highlights the gravity of this issue. Despite Hesai's attempts to distance itself from its Chinese origins, the potential for these technologies to be used for espionage or data collection remains a critical concern. The fact that almost one-fifth of Hesai's revenue comes from the U.S. underscores the extent of their integration into our market and the potential risks involved.

Moreover, the legal rebranding efforts by other Chinese companies in high and sensitive technology sectors, such as BGI Group (biotechnology), CATL (batteries), and SZ DJI Technology (drones), further illustrate the lengths these entities will go to avoid regulatory oversight. These actions not only frustrate our regulators but also expose our industries and consumers to potential threats from foreign adversaries.

It is imperative that we take decisive action to address these challenges. We must strengthen our regulatory frameworks to ensure that companies attempting to rebrand or establish new subsidiaries are thoroughly vetted and held accountable. Additionally, I call on this administration to take more expeditious action to add companies to our various entity lists, export controls, and capital markets sanctions list, preventing Chinese military entities from exploiting our markets and compromising our national security. The lack of robust utilization of such tools is an unacceptable self-imposed weakness in U.S. economic statecraft that must be remedied.

Furthermore, these companies are enriching the CCP’s interests rather than those of Americans’. I have been a staunch advocate for reducing our reliance on Chinese imports and protecting American jobs and industries through my bipartisan "Buy American" resolution among other legislative efforts aimed at bolstering domestic manufacturing capabilities.

The stakes are high; we cannot afford complacency against aggressive expansionist policies disregarding international norms by CCP which pose direct threats requiring vigilance defending national interests ensuring economic-security policy urgency reflects challenge’s magnitude.

Thank you for your attention addressing critical matters looking forward collaboratively tackling pressing issues safeguarding American people against foreign adversarial threats.

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