US probing Huawei for possible Iran sanctions violations

ZTE says US ban will 'severely impact' its survival and partnerships

ZTE says US ban will 'severely impact' its survival and partnerships

The New York Times has reported that the company has been subpoenaed by the Commerce and Treasury Departments over alleged violations of Iran and North Korea sanctions.

News of the Justice Department probe follows a series of USA actions aimed at stopping or reducing access by Huawei and Chinese smartphone maker ZTE Corp to the US economy amid allegations the companies could be using their technology to spy on Americans.

China's ZTE Corp said on Wednesday it planned to take "certain actions" under US laws following a ban by the USA government on American firms doing business with the company. ZTE had previously reached a settlement with the Commerce Department's Bureau of Industry and Security, and pleaded guilty as part of a sanctions-violations agreement with the Justice Department. The company already caught the attention of the US government back in 2012 for its rumored ties with the Chinese government. Now, the Wall Street Journal reports the government is taking more direct action against the Chinese technology giant.

The DoJ declined to comment, while Huawei was not immediately available for comment.

In 2016, the Commerce Department made documents public that showed ZTE's misconduct and also revealed how a second company, identified only as F7, had successfully evaded USA export controls.

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Schloss, the Huawei spokesman, said those allegations aren't true.

We see Ciena (CIEN, $26.36, Buy), Infinera (INFN, 11.56, Hold), and possibly Nokia (NOK, $6.00, NC) as potential winners from any incremental sanctions against Huawei. Big box electronics retailer Best Buy said last month that it would stop selling Huawei smartphones.

According to the report, the Department of Commerce has agreed to receive new evidence from ZTE through an informal procedure.

Huawei maintains research and development facilities in Texas, New Jersey, California and four other US states, all of which provide technology for Huawei's global operations.

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