US probing Huawei for possible Iran sanctions violations

Chinese telecom equipment maker Huawei is reportedly under investigation by the US Justice Department for allegedly violating Iran sanctions

The Wall Street Journal's Stu Woo and Aruna Viswanatha relate that multiple unnamed sources say the DoJ is "investigating whether Huawei Technologies Co. violated US sanctions related to Iran".

ZTE Corp., one of China's biggest tech companies, said Sunday that it is taking steps to comply with a US technology ban and that it is seeking a solution to the issue it says threatens its survival.

The Justice Department probe is being run out of the USA attorney's office in Brooklyn, the sources said.

The action was sparked by ZTE's violation of an agreement that was reached after it was caught illegally shipping U.S. goods to Iran.

Earlier this month, the Commerce Department banned ZTE, China's second-biggest network equipment maker, from buying USA -made components as punishment for violating a sanctions settlement over transactions with Iran and North Korea.

A group of Republican lawmakers pushed the Trump administration last April to investigate and identify F7, citing news reports that have highlighted the similarities between the company described in the documents and Huawei.

Details on specific violations the DOJ's Huawei investigation is probing are not known yet. They warned that the company is "beholden" to the Chinese government and that we shouldn't trust their electronics. Ciena and Infinera, of course, compete with both Huawei and ZTE in worldwide markets (except China).

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.

Huawei was founded in 1988 by former Chinese army engineer Ren Zhengfei, leading to congressional concerns over Chinese military and government influence at the company. Government reports have also accused both ZTE and Huawei of being security threats to the US.

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

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