Chinese Tech Powerhouse Huawei is Under Investigation for Iran Sanctions Violations

by: The Knowledge Group

May 01, 2018


The Wall Street Journal reports the Justice Department is looking into possible violations of sanctions against Iran committed by the Chinese tech company Huawei. Though few details have been provided about this investigation, the probe is of particular importance as it is symbolic of the ever-increasing analysis of Chinese manufacturers seeking an even larger portion of the United States market as well as the global market. The initial reports are vague to the point that no one outside of the investigation knows exactly what Huawei is alleged to have done.

Federal Authorities are Questioning Whether Huawei can be Trusted to Operate in the United States

Like many other Chinese tech companies, Huawei has faced some significant obstacles in its quest to operate in the United States. The federal government rightfully questions whether Huawei will be cooperative with Chinese government officials and whether such interactions might compromise national security. Of particular importance is the fact that AT&T exited a deal with Huawei earlier this year following lawmakers’ uneasiness about the Chinese tech provider. After all, the penalty for violating sanctions issued by the federal government can be quite damaging to the bottom line. It is also worth noting ZTE, a Chinese smartphone manufacturer, was hit with a fine in excess of a billion dollars for product sales to North Korea and Iran.

Will the Huawei Investigation Impact the United States’ Fragile Relationship With China

The Department of Commerce has gone to the extent of banning all American exports to Huawei. Despite the penalty and latest round of investigations, Huawei representatives are adamant the company adheres to all relevant regulations and laws in the areas it operates. The investigation efforts will only fan the flames of the brewing trade war between the United States and China. Additional penalties applied to Huawei could trigger a response from the Chinese government in the form of increased tariffs or even a partial ban of American goods.

The Huawei Investigation is a Developing Story Worth Following

Tech and government experts question whether there is an alternative approach to potentially penalizing Huawei even further or if additional actions will backfire by harming American-Chinese relations that much more. Stay tuned. We will likely learn more details about the latest round of Huawei investigations in the coming weeks and months.

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