Huawei is under Department of Justice investigation for violating Iran sanctions

Huawei is under Department of Justice investigation for violating Iran sanctions

Huawei is under Department of Justice investigation for violating Iran sanctions

The ban, according to a Nikkei report, stems from a March 2017 settlement between ZTE and the U.S. Commerce Department in which the company was found to have violated U.S. sanctions between 2010 and 2016 by shipping telecom equipment to Iran and North Korea and hiding those transactions through various means.

Last year, the White House blocked two proposed mergers between USA companies and Chinese companies. The company is supposedly being investigated by the Department of Justice for violating sanctions against Iran; something that could lead to severe penalties and a possible ban.

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. The probe was first reported by the Wall Street Journal on Wednesday.

The action was sparked by ZTE's violation of an agreement that was reached after it was caught illegally shipping United States goods to Iran. A Huawei spokesman declined to comment. They warned that the company is "beholden" to the Chinese government and that we shouldn't trust their electronics.

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ZTE initially responded saying it was assessing the situation , and suspended trading of its Hong Kong- and Shenzhen-listed shares.

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.

The US has taken a recent stance against Huawei's products.

Following a somewhat gloomy outlook from Apple's main supplier of semiconductors, Taiwan Semiconductor Manufacturing Co., markets are also losing confidence in Chinese hardware makers.

Huawei, the world's largest maker of telecommunications network equipment and the No. 3 smartphone supplier, said it complies with "all applicable laws and regulations where it operates, including the applicable export control and sanction laws and regulations of the UN, US and European Union". Earlier this year, things escalated when carriers and, later, retailers pulled out from partnerships with Huawei, refusing to sell its smartphones.

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