Published: Fri, March 08, 2019
Money | By Bruce West

Huawei sues the U.S. government over multiple issues

Huawei sues the U.S. government over multiple issues

The U.S. accounts for 20 percent to 25 percent of the global market for computer and telecom technology.

The fracas between the U.S. government and Chinese anufacturing giant, Huawei, just got interesting as the company has chose to take an unprecedented step. The case asks the court to reject as unconstitutional part of the legislation setting military spending levels.

Huawei said the US law it is protesting has Congress improperly play the role of a court.

It comes as the biggest global maker of network equipment for phone and internet companies fights USA efforts to persuade allies to exclude the company from next-generation telecom systems. It says it supplies 45 of the world's top 50 phone companies and has contracts with 30 carriers to test 5G wireless technology. Last year, the Trump administration banned Chinese company ZTE Corp. from purchasing critical USA technology for violating export sanctions against Iran and North Korea.

In a 13-count indictment, the U.S. Department of Justice accuses Meng, Huawei, and several of the company's subsidiaries of violating sanctions against Iran. Huawei says the law punishes the company for unproven accusations, and would harm its future earnings.

There are fears that China is using Huawei as a proxy so it can spy on rival nations and scoop up useful information. Huawei has argued for years that it is not involved in Chinese spying.

Huawei's rotating chairman Guo Ping speaks during a press conference in Shenzhen, China on March 7, 2019.

Guo said the company was seeking unspecified damages for what he called "unconstitutional" restrictions.

US President Donald Trump told Reuters he would consider intervening in her case - a potential action he alluded to again two weeks ago - if it would help close a trade deal with China. The court statement came after a federal court in Seattle, Washington, announced charges against two of the company's businesses in January.

Meng faces a May 8 hearing in Vancouver, where she was arrested while changing planes. The centralized nature of the Chinese government, with its close ties to industry, and the many well-documented cases of Chinese hacking would all support the position that the US law has a reasonable basis.

The airport stop provided key evidence against ZTE in its legal battle with the United States, according to U.S. officials. China has arrested two Canadians on national security grounds and sentenced another to death.

At a routine briefing Thursday, a Chinese foreign ministry spokesman noted that the Chinese government has also objected to the law. He added that Huawei has the right to defend its business through the legal system.

In the years leading up to the Huawei indictment, USA officials had been capturing information that would influence the investigation when telecom executives passed through United States airports, according to a number of sources familiar with the Huawei and ZTE investigations and the Meng indictment. But it sells very little in the United States after Congress said the company was a security risk in 2012.

Last June, the Trump administration slapped the European Union with steel and aluminum tariff hikes, forcing Brussels to respond against American products like bourbon whiskey and Harley-Davidson motorcycles.

In the never-ending Huawei saga, the Chinese company has made a decision to file a lawsuit in the Eastern District of Texas against the USA government for the latter's ban on the sale of equipment or services to government entities.

Brooklyn prosecutors discussed the relationship between Huawei and HSBC, a bank that was required to cooperate with United States prosecutors in any investigation until the end of 2017 for violating United States anti-money laundering and sanctions laws, the person added.

Huawei's chief legal officer, Song Liuping, said the two cases were different in terms of evidence and scope, and that the Chinese firm's case had "full merits". Moreover, Huawei has an excellent security record and program.

Australia, Japan, Taiwan and some other governments also have set limits on using Huawei technology.

"Huawei has not and will never implant 'backdoors, ' " said Guo, the chairman.

Chinese authorities and some industry analysts say Washington might be exaggerating security concerns to limit competition with Western vendors. It might also cause higher prices. It would also be part of the foundation for 5G technology.

The United States says Huawei equipment could be manipulated by China's Communist government to spy on other countries and disrupt critical communications.

Reuters legal experts noted Russian software firm Kaspersky Lab filed a comparable "bill of attainder" challenge to the USA ban on its products in 2017, but the suit was rejected, in part because the federal government presented "ample evidence" that Kaspersky products presented a security risk.

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