- Vendor linked to sanction-flouting front companies in Iran, Syria
- Rival ZTE was fined $1.2bn for similar misdeeds
- Huawei refuses to comment on new revelations
"When it comes to security allegations, it's best to let the facts speak for themselves. And the fact is: Huawei's record on security is clean."
These words, said by Huawei's rotating CEO Ken Hu in a speech to employees at the company's new Dongguan campus in late December, were in reference to cybersecurity and the suspicions held in some quarters about Huawei's willingness or otherwise to provide backdoor network access to China's military, but broadly speaking his message was clear: Huawei can be trusted.
Unfortunately for Hu and Huawei, new revelations reported by Reuters on Tuesday, if confirmed, speak loudly and clearly of an organisation that used front companies to circumvent sanctions on Iran and Syria. Not exactly the behaviour of a trustworthy enterprise.
Flouting sanctions can and has landed companies in seriously hot water in the past. In 2017, China's other telecoms equipment supplier ZTE was fined a record-breaking $1.2 billion for 'systemically misleading' US authorities about illegal shipments to Iran and North Korea. Senior executives were shown the door, and the company was temporarily placed on a US export blacklist.
Huawei declined to comment when contacted by TelecomTV.
The Chinese kit maker attempted to get back to business as usual this week, unveiling an ARM-based server chipset that it claims beats industry benchmarks by 25 percent while consuming 30 percent less power. However, the announcement proved a very brief distraction from Huawei's ongoing tribulations.
Hu's aforementioned speech came shortly after the arrest and subsequent release on bail of Huawei CFO Meng Wanzhou, daughter of Huawei founder Ren Zhengfei. She was detained in Canada at the request of US authorities investigating her alleged involvement with two companies – Skycom Tech and Canicula Holdings – suspected of operating as front companies for Huawei in Iran and Syria respectively.
Huawei said at the time that it has no control over the two firms. However, Reuters on Tuesday said it found documents and corporate filings in Iran and Syria that prove Huawei has close ties to both Skycom and Canicula.
More specifically, a high-ranking Huawei executive was appointed as Skycom's Iran manager, and at least three Chinese individuals had signing rights for Huawei and Skycom bank accounts in Iran.
Meanwhile, in Syria, it emerged that a lawyer called Osama Karawani corrected a 2014 news article that had implied Huawei's entire Syrian business had been liquidated, when actually it was just a Huawei company that supplied ATM equipment that had shut up shop. Karawani, who had been named in the report as the appointed liquidator, was quoted as saying that Huawei was very much alive and well in Syria, operating as Canicula Holdings and Huawei Technologies.
Throughout this saga – which has seen the US, Australia, New Zealand, and the UK ban telcos from using Huawei network equipment – Huawei has portrayed itself as a victim of paranoia stoked by the ongoing trade dispute between the US and China. This portrayal has a certain ring of legitimacy to it when you remember that the campaign against Huawei is being led by a chaotic US administration headed by a barefaced liar in Trump.
However, Huawei's claim to victimhood starts to ring a little hollow when news agencies find evidence of using front companies to flout sanctions. It is too early to say how much damage these revelations will cause, but there is no doubt that they undermine Huawei's claim that it plays by the rules.
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