A couple of weeks ago, ZTE was sanctioned for lying to the US government. This week, another OEM is facing a similar challenge. Huawei is now facing criminal investigation in the United States for illegal sales in Iran. There is no official decision yet because the investigation is still underway. The Justice Department is looking into the issue and is tasked to check if Huawei did sell illegally. This is another blow for the top Chinese OEM that is now being challenged in entering the US market.
If proven guilty, Huawei will experience what ZTE has recently experienced. This move may have effects not only for Huawei Mobile but also its other business especially in the European region. The export sanctions related to Iran is making companies like Huawei and ZTE rethink their businesses.
Losing the US market may have a big effect especially for ZTE. Huawei, on the other hand, may not be affected in a big way because the US isn’t its main market. In fact, it’s having a hard time getting on it since the government has been urging carriers and retailers to cut deals with the Chinese tech giant.
The export and sanctions violations are definitely challenging companies. We just remember that two years ago, a US government agency had asked information about the exports and re-exports of US technology–both direct and indirect. This was in relation to the trade sanctions and economic embargoes that include Iran, Cuba, North Korea, Syria, and Sudan. Huawei was given the subpoena to provide information. It was also asked to explain their “technology and services provided to Cuba, Iran, Sudan and Syria over the past five years. It also called for the identity of individuals who played a part in those transactions.”