Justice Department investigating Huawei for violating United States sanctions on Iran

Commerce Department to accept evidence from ZTE in “informal procedures”

The US Department of Justice is investigating if Chinese tech company Huawei Technologies Co violated US sanctions in relation to Iran, The Wall Street Journal reported on Wednesday.

Since at least 2016, US authorities have been probing Huawei's alleged shipping of USA -origin products to Iran and other countries in violation of USA export and sanctions laws, two of the sources said. The New York Times last April reported the U.S. Treasury's Office of Foreign Assets Control subpoena, issued in December 2016, following a Commerce Department subpoena that summer.

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

ZTE pleaded guilty in March 2017 and agreed to pay a $1.19 billion penalty for having shipped equipment to Iran and North Korea in violation of USA regulations.

The Journal report gave no details about the investigation.

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

Investors are getting anxious regarding Chinese tech stocks following the announcement of a U.S. ban on ZTE and slowing smartphone sales, with big firms such as Lenovo faring poorly on the markets.

ZTE banned from U.S. Market fro a term of seven years
ZTE banned from U.S. Market fro a term of seven years

Signaling the rising unease in the United States towards Huawei and fellow Chinese telecoms group ZTE Corp, last month the Federal Communications Commission proposed a new rule that would restrict small telecoms carriers from purchasing "equipment or services from companies that pose a national security threat".

Huawei and ZTE have denied these allegations.

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.

Huawei has faced several setbacks in the USA this year.

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

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

Republican Senators Marco Rubio and Tom Cotton have introduced legislation that would block the US government from buying or leasing telecommunications equipment from Huawei or ZTE, citing concern that the Chinese companies would use their access to spy on USA officials. Then, consumer electronics retailer Best Buy Co. stopped selling Huawei phones, laptops and smartwatches. Still, another setback in the U.S. market could cause Huawei to throw in the towel and concentrate on other regions.



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