Friday December 07, 2018

Huawei is in Trouble

Last month, the Wall Street Journal reported the the U.S. Government asked its allies to stop buying Huawei equipment. Since then, things have gone downhill for the Chinese company. Japan, Australia, New Zealand, Canada, and the UK have all all allegedly stopped buying Huawei equipment. Meanwhile, Reuters reports that Huawei's chief financial officer was recently arrested in Canada "as part of a U.S. investigation into an alleged scheme to use the global banking system to evade U.S. sanctions against Iran, according to people familiar with the probe." Chinese media are criticizing the arrest, but Huawei claims it is cooperating with the relevant authorities.

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More recently, the probe has included whether the company used HSBC Holdings Plc to conduct illegal transactions involving Iran, the people said. Companies are barred from using the U.S. financial system to funnel goods and services to sanctioned entities. If the mobile phone and telecoms equipment maker conducted such transactions and then misled HSBC about their true nature, it could be guilty of bank fraud, experts say.