DOJ is investigating Huawei for violating Iran sanctions

Thursday, 26 Apr, 2018

According to the Wall Street Journal, the U.S. Department of Justice is investigating Chinese phone manufacturer and network supplier Huawei. The Commerce Department in 2016 issued an administrative subpoena aimed at Huawei, China's largest maker of telecommunications equipment, seeking information about whether it was sending USA technology to rogue nations including Syria, Iran and North Korea. The company failed to comply with the punishment set forth by the U.S. Commerce Department and now is banned from receiving U.S. exports until March 2025.

Huawei would not comment on the Journal report.

On April 20, ZTE said that the U.S ban was unfair and threatens its survival.

As we stated with the ZTE situation last week, the ingredients for some really significant optical component purchases are potentially getting put in place right now. ZTE, which has also been linked to the Chinese government and possible espionage issues, was found guilty a year ago of sending goods and services to Iran and North Korea, and fined $1.19 billion.

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ZTE, which sells smartphones in the United States, paid $890 million in fines and penalties, with an additional penalty of $300 million that could be imposed.

"Huawei complies with all applicable laws and regulations where it operates, including the applicable export control and sanction laws and regulations of the UN, US and European Union", spokesman Charles Zinkowski said in a statement.

The U.S. Treasury Department's Office of Foreign Assets Control, or OFAC, which enforces sanctions, and the Department of Commerce are also looking into Huawei's transactions. In addition to producing networking gear and other electronics, it was the globe's No. 3 smartphone seller past year behind Samsung Electronics Co. and Apple Inc. China doesn't actually have any sanctions on the country, and shipping Chinese technology would not directly violate USA sanctions. Ciena and Infinera, of course, compete with both Huawei and ZTE in worldwide markets (except China). This is just the latest action against Iran, which has always been blocked from selling telecom equipment to USA carriers by the US government.

China's ZTE is seeking a resolution to a U.S. ban on selling it parts and software that it has said threatens its survival. AT&T Inc. and Verizon Communications Inc., the biggest USA carriers, dropped plans to sell Huawei's latest smartphones.