DOJ is investigating Huawei for violating Iran sanctions

DOJ is investigating Huawei for violating Iran sanctions

Kerry Wise
April 26, 2018

The New York Times has reported that the company has been subpoenaed by the Commerce and Treasury Departments over alleged violations of Iran and North Korea sanctions.

Analysts said a worst-case scenario could entail Huawei suffering the same fate as smaller Chinese rival ZTE which has lost access to US -made components as well as Google Android software in a similar probe. The company is supposedly being investigated by the Department of Justice for violating sanctions against Iran; something that could lead to severe penalties and a possible ban.

The DOJ's actions follow a larger pattern of the USA increasingly cracking down on Chinese firms.

The Journal report gave no details about the investigation. ZTE had previously reached a settlement with the Commerce Department's Bureau of Industry and Security, and pleaded guilty as part of a sanctions-violations agreement with the Justice Department.

Glenn Schloss, a spokesman for Huawei in Shenzhen, declined to comment about the probes.

The government's order, which went into effect immediately, bans American firms from exporting components directly to ZTE or through a third country until March 13, 2025.

Mnuchin Considering Visit to China to Discuss Trade Practices
Mnuchin said as much during a news conference Saturday, telling reporters "a trip is under consideration", according to CNN . The short statement suggests there may be room for negotiation amid the escalating tension between China and the US.

In April, the Federal Communications Commission (FCC) announced that it would consider policies to stop using portions of its funding on products from companies that pose a potential national security threat.

Huawei and ZTE have denied these allegations.

In a 2016 letter to the Commerce Department, 10 USA lawmakers said F7 was believed to be Huawei, citing media reports.

Following a somewhat gloomy outlook from Apple's main supplier of semiconductors, Taiwan Semiconductor Manufacturing Co., markets are also losing confidence in Chinese hardware makers.

Huawei has faced several setbacks in the USA this year.

Huawei maintains research and development facilities in Texas, New Jersey, California and four other USA states, all of which provide technology for Huawei's global operations.