U.S. officials are reportedly widening an investigation into whether Huawei violated trade controls with Cuba, Iran, Sudan and Syria.
The New York Times reported this week that a previously unreported subpoena was sent to Huawei in December by the U.S. Treasury Department, signaling an expansion of an earlier probe into the Chinese firm’s dealings. The administrative document doesn’t indicate Huawei is under criminal investigation, according to the Times, but it suggests the company might be suspected of violating American embargoes.
Huawei this week denied any wrongdoing, the Times reported, saying it “has adhered to international conventions and all applicable laws and regulations” in the markets in which it does business.
The news follows a report earlier this month that ten members of Congress had urged Commerce Secretary Wilbur Ross to “investigate and unmask” a company believed to have flouted U.S. sanctions laws. The business, said to be a rival of ZTE, is identified only as “F7” in an internal ZTE document from 2011 posted on the Commerce Department’s website.
As The New York Times noted last year when ZTE’s internal document first came to light, the description of F7 aligns with Huawei, which the newspaper noted is “a company far larger and more politically sensitive” than ZTE. The legislators also highlighted the similarities between F7 and Huawei in their letter, Bloomberg reported.
The Commerce Department last year said it had uncovered plans by ZTE to use multiple shell companies to re-export controlled items to Iran, which would violate U.S. control laws. As a result, the U.S. government imposed export restrictions on the company, preventing ZTE from conducting business in the United States and working with U.S. suppliers like Broadcom and Qualcomm. But ZTE received multiple reprieves from those restrictions as investigations into the company continued.
ZTE last month pled guilty to violating the International Emergency Powers Act, the U.S. Department of Justice said, agreeing to pay a $287 million fine and “criminal forfeiture” of $143.5 million as well as submitting to a three-year probationary period.
The Huawei investigation could further heighten tensions between the U.S. and the Chinese gear vendor. A U.S. government report issued in 2012 labeled China-based network vendors Huawei and ZTE as security threats that could be used as backdoors for Chinese espionage. Both companies have repeatedly said the claims are without merit, but the report has largely blocked Huawei from selling equipment to the nation's tier-one wireless operators like Verizon and AT&T.