Published: Fri, March 08, 2019
Money | By Arnold Ball

China's Huawei Sues US Government Over Ban

China's Huawei Sues US Government Over Ban

Increasingly, both sides appear to be resorting to courts to press their cases. The indictment says investigators found "suggested talking points" on one of her electronic devices, stating among other things that Huawei's relationship with Skycom was "normal business cooperation". Meng Wanzhou was arrested a year ago in Canada.

The company's chief financial officer, Meng Wanzhou, was arrested December 1 in Canada on US charges of lying to banks about dealings with Iran. Huawei denies any wrongdoing.

Some European officials and others cite a Chinese security law requiring companies to co-operate with intelligence agencies.

Chinese Ministry of Foreign Affairs spokesman Lu Kang (陸慷) said in Beijing that it was "entirely legitimate and understandable for enterprises to safeguard their legitimate rights and interests through legal means".

Huawei denies altering its equipment to facilitate spying and has set up testing centres in Britain, Canada and continental Europe to allow governments to examine its technology.

In the years leading up to the Huawei indictment, United States officials had been capturing information that would influence the investigation when telecom executives passed through U.S. airports, according to a number of sources familiar with the Huawei and ZTE investigations and the Meng indictment.

With the case against ZTE wrapping up, more than a dozen people from Departments of Treasury, Commerce, Homeland Security and Justice, gathered in Washington on February 14, 2017 and talked about how they were moving forward against Huawei, according to a person familiar with matter.

"The US Congress has repeatedly failed to produce any evidence to support its restrictions on Huawei products". He complained Washington was "sparing no effort to smear" the company.

If Huawei's case survives a motion to dismiss, the Chinese company would be allowed to demand discovery from the USA government, including documents and possibly the testimony of officials. The United States accounts for 20 to 25 per cent of the global market for computer and telecom technology.

By hiding Skycom's connection to Huawei, Meng is accused of personally misleading USA banks into clearing cash connected with transactions between the two companies.

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The ban is "based on numerous false, unproven and untested propositions", the company's chief legal officer, Song Liuping, said at the news conference.

The court in that case said national security concerns about Kaspersky were supported by "ample evidence" and that it needed to give Congress "latitude" to craft measures to protect national security. "No contrary evidence has been offered".

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

Based in Shenzhen, near Hong Kong, Huawei is a leading developer of 5G along with rivals Nokia of Finland and Sweden's LM Ericsson. Industry analysts say excluding the Chinese vendor from markets for 5G equipment would reduce competition and might lead to higher prices.

Only 30 per cent of Huawei's equipment comes directly from Huawei, he said, while the rest comes from the global supply chain.

Amid security concerns and pressure from the USA, the British government is now reviewing whether Huawei should participate in the rollout of 5G.

Meng faces a May 8 hearing in Vancouver, where she was arrested while changing planes. Two affiliates also have been charged with stealing trade secrets from telecommunications group T-Mobile. That followed the Canadian government's announcement Friday that the extradition proceeding would be allowed to continue.

Huawei executives said American security warnings have yet to affect sales outside the U.S. The company's 2018 revenue forecast is $100 billion, and its founder, Ren Zhengfei, said last month this year's target is $125 billion.

Germany does not want to ban Chinese telecoms equipment maker Huawei Technologies from building its 5G networks, Economy Minister Peter Altmaier said on Thursday, adding that Berlin would tighten security criteria for all vendors instead.

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