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    Huawei in hotter water; company asks its U.S. suppliers to break the law

    Huawei in hotter water; company asks its U.S. suppliers to break the law
    Locked out of its U.S. supply chain on which it spent $11 billion last year, Huawei has relied on stockpiles of components it built up in anticipation of such a ban. And while the lack of the Google Play services version of Android and Google's core Android apps is more problematic for the manufacturer's global sales, it appears that inside China the bloom is off the rose. State-run media and social media are attacking China's darling for making bogus accusations against a former employee that left him jailed for 251 days; the company never apologized.

    Now, according to U.S. Commerce Secretary Wilbur Ross, who spoke with Reuters, Huawei is trying to get its U.S. suppliers to break the law by asking them to move their operations offshore. Back in May, Ross' department placed the company on the entity list for security reasons. As a result, the manufacturer is not allowed to purchase U.S. software or components. While some still believe that Huawei will be used as a bargaining chip by U.S. negotiators working on a new trade agreement with China, the firm is considered a national security threat in the states. That's because a law in China allows the reigning government to demand that Huawei spy on its behalf. As a result, American lawmakers fear that the firm's phones and networking equipment contain backdoors designed to send information to Beijing. Huawei has always denied these allegations which date back to at least 2012.

    Huawei files a lawsuit against the FCC for banning the USF from purchasing Huawei networking equipment

    Ross said today that Huawei has "been openly advocating companies to move their production offshore to get around the fact that we put Huawei on the list. Anybody who does move the product out specifically to avoid the sanction... that’s a violation of U.S. law. So here you have Huawei encouraging American suppliers to violate the law." Last week, we told you that the Trump administration is seeking to tighten the screws on Huawei by enforcing the Direct Product Rule. Under this rule, foreign-made products with U.S.-origin software or technology would still be subject to the ban. And under the de minimis rule, foreign-made products consisting of at least 25% U.S.-origin content by value are subject to U.S. export controls. The Commerce Department is reportedly thinking about lowering the threshold to less than 25%; this would have the effect of allowing the U.S. to block components made outside of the states from reaching Huawei. Ross said that Huawei asking its U.S. suppliers to move offshore "has flagged an issue we’ve been starting to deal with. Whether 25% is forever and all time the right ratio, that’s something to be resolved."

    Yesterday, Huawei filed a lawsuit against the FCC in the Fifth Circuit Court of Appeals in New Orleans. The company is looking to stop the regulatory agency from blocking the use of money from the Universal Service Fund (USF) for the purchase of networking equipment from Huawei. The FCC recently voted 5-0 to block such purchases using USF money. The USF is managed by the FCC and is funded by consumers when they pay their phone bills. The money is supposed to go to those in rural or low-income areas who normally would not be able to access or afford a phone line or an internet connection. And the FCC is reportedly planning a vote that would force carriers to remove any Huawei gear used on their 2G, 3G, and 4G networks. This could harm rural carriers, many of which purchased Huawei's lower-priced gear. Huawei is the world leader in networking equipment with a 28% market share.

    Huawei's argument is pretty much straight-forward. The company states that it never received due process from the U.S. and claims that the FCC's decision to block USF funds from purchasing Huawei's equipment is political. Today,  Huawei attorney Song Liuping told the media, "Banning a company like Huawei, just because we started in China -- this does not solve cybersecurity challenges. Huawei also submitted 21 rounds of detailed comments, explaining how the order will harm people and businesses in remote areas. The FCC ignored them all."



    1. Guseinguliev

    Posts: 141; Member since: Mar 04, 2019

    Huawei an aggressive company for me.

    2. d1g1te

    Posts: 68; Member since: Oct 04, 2016

    Huawei is breaking law by asking to move companies away from USA? How? Companies can have their HQ whereever they want. Ross is just scared that companies will start to leave USA, because of Trump's stupid trade war with China.

    4. Feanor

    Posts: 1422; Member since: Jun 20, 2012

    It's stated in the article; Companies cannot move legally offshore to specifically avoid abiding to sanctions.

    6. Alcyone

    Posts: 590; Member since: May 10, 2018

    I could care less what the outcome is. But, couldn't a company use the excuse of lower operating costs to move abroad? That could include research and/or development costs. Just my opinion, but I think many companies work abroad for that reason. That's a gray area at best. But, money always wins out. If not, Apple and other US founded companies would produce a lot more domestically.

    18. d1g1te

    Posts: 68; Member since: Oct 04, 2016

    I would like to see any lawyer to prove that such company that is moving abroad is doing that to avoid abiding to sanctions. They would be simply leaving country which foreign politics breaks global market and free trade principals. With your thinking it should be also illegal to drag private company into trading dispute between US and China government. Label it as security thread, without any clear evidence supporting that claim and use it as bargain chip in trade dispute along with hostage in form of Huawei CFO held in Canada. Governments should not be allowed to influence other country private company like this. Or do you really want to live in age, when governments use this kind of tactics and power to hurt each other and each other companies? I don't.

    20. d1g1te

    Posts: 68; Member since: Oct 04, 2016

    Just to be clear. I am not against reasonable and justified sanctions. But in this case US government is trying to systematically destroy biggest Chinese tech company. By any means possible. Reasonable sanctions would be for example to put some kind of tarif on Huawei. But not ban it completely and upper hand its CEO daughter without putting forward any solid evidence of wrongdoing. This kind of violent actions are really bad for whole world. As violence produces just another violence. There is always better, less violent way how to do it. If US would have president that have some brains, this would never happen.

    3. d1g1te

    Posts: 68; Member since: Oct 04, 2016

    If US companies have any brains they will leave US. It become xenophobic mad house under Trump. With his precious wall with Mexico, non-sense immigration policies, leaving Paris agreement, raising taxes for poor people and lowering them for rich ones and much more. Only thing that can now save USA and restore it's dignity is new president, ASAP.

    5. RevolutionA

    Posts: 529; Member since: Sep 30, 2017

    Hit those brakes man. Huawei is a national threat and because of those precious policies we are living. You should be thrown to the other side of the great barrier.

    7. Vancetastic

    Posts: 1810; Member since: May 17, 2017

    LOL. You can't be for real. I hope...

    9. RevolutionA

    Posts: 529; Member since: Sep 30, 2017

    I am. Proof? If you could come to USA

    10. Vancetastic

    Posts: 1810; Member since: May 17, 2017

    Wait...where do you think I am? At any rate, your comments crack me up.

    11. RevolutionA

    Posts: 529; Member since: Sep 30, 2017

    You should be thrown too

    15. Vancetastic

    Posts: 1810; Member since: May 17, 2017

    LOL. Keep 'em coming!

    22. tedkord

    Posts: 17492; Member since: Jun 17, 2009

    You're welcome to try and throw us any time you're feeling up to it, sport. Meanwhile, we'll be throwing Trump to the curb next year.

    12. ScottsoNJ56

    Posts: 142; Member since: Oct 01, 2017

    Trump will be President again and make America even greater !!!

    14. jiangqiushi

    Posts: 43; Member since: May 28, 2019

    Trump will be president again and make American even more laughable !!! (as if it's not already)

    16. ScottsoNJ56

    Posts: 142; Member since: Oct 01, 2017

    What was laughable was thinking Hillary Clinton would be President. Now that was funny ( Really Funny)

    23. tedkord

    Posts: 17492; Member since: Jun 17, 2009

    She'd have been a better president. But then, so world your average 5 year old.

    24. ScottsoNJ56

    Posts: 142; Member since: Oct 01, 2017

    That's why we voted in Trump. We didn't want a dumb 5 year old lol

    19. inFla

    Posts: 195; Member since: Aug 17, 2018

    The only thing that can save the USA is for people like you to move out.

    8. chenski

    Posts: 787; Member since: Mar 22, 2015

    Huawei just need to ride it out until next year reelection

    13. QuantumRazer

    Posts: 205; Member since: Apr 27, 2019

    Any comments from Huawei's business partners or suppliers to support what he says? I mean like, Wilbur Ross can say anything he wants to say about it, but at least I was expecting to see some evidence to back up his claim.

    17. ShadowSnypa786

    Posts: 642; Member since: Jan 06, 2017

    Glad they got caught. Huawei fanboys you needed to defend them

    21. ShadowHammer

    Posts: 213; Member since: Mar 13, 2015

    I would just like to see some evidence of Huawei's backdoors. The US govt keeps saying they may have them, or the Chinese govt may force them to put them in, but then they provide nothing to substantiate that claim. I think the US govt is still irked over Huawei selling stuff to Iran some years back, and figures they will do whatever they want to make money. And the US govt doesn't like things/people they can't control/coerce/manipulate.

    25. ScottsoNJ56

    Posts: 142; Member since: Oct 01, 2017

    I hope the US keeps up the pressure and keeps Huawei in China where they belong. They want to break rules,steal intellectual property and sell to Iran when they're prohibited. I hope they keep them this way until they admit wrong doing
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