US Department Of Justice Is Investigating Huawei For Violating Iran Sanctions

Saul Franklin
April 27, 2018

The Department of Justice (DOJ) is investigating Chinese phone-maker Huawei over whether it violated US sanctions against Iran, The Wall Street Journal reported on Wednesday. We don't know the specifics of the investigation, but Huawei could face similar penalties if the government decides it acted improperly.

Such a probe raises the stakes for Huawei, which is facing a series of actions by Washington to diminish the company's already limited business dealings in the U.S. It could also have spill over effects for its much larger business overseas, particularly in Europe and markets such as Australia where the Federal Government is considering a ban on Huewei supplied 5G networking gear.

ZTE was slapped with a seven-year export ban last week by the US Department of Commerce for breaching the settlement terms of violating US sanctions on selling telecoms equipment to Iran and North Korea.

"It was a factual update on what happened, what they've done since the order was put in place, and what they're doing to remedy the situation", a Semiconductor Industry Association spokesman said.

On its part, Huawei says that it complies with all applicable laws and regulations in the countries where it operates. ZTE was accused of violating an agreement to punish employees involved in illegal shipment of USA goods to Iran.

Both companies also have been under scrutiny by USA lawmakers over cybersecurity concerns.

"We hope that the United States will not take actions that further harm investors' mood towards the business situation there".

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In a separate case, Washington barred ZTE Corp., another Chinese tech company, from exporting USA technology in a case over exports to Iran and North Korea.

This suspicion of possible espionage has lead to the collapse of a deal that would being Huawei devices to USA telcos.

Although ZTE will bear the brunt of the impact from the ruling by the US Department of Commerce, relevant US partners will suffer as a result. China doesn't actually have any sanctions on the country, and shipping Chinese technology would not directly violate USA sanctions.

"The ban will not only severely impact the survival and development of ZTE, but also cause damage to all partners of ZTE including a large number of us companies", ZTE said in a statement.

For ZTE, which is now subject to a seven-year ban on business with United States companies, shares have been suspended from trading.

Since April 2016, ZTE Corporation (hereinafter referred to as "ZTE") has continuously reflected on lessons from its past experience in Export Control Compliance and has attached great importance to Export Control Compliance.

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