Huawei sues US Department of Commerce over seizure of telecom equipment

Huawei Technologies Co Inc, the Chinese telecom giant, sued the US Department of Commerce in court over US seizure of telecommunication equipment. The issue between Huawei and the Commerce Department is whether the telecommunications equipment sent by Huawei from China to the United States, and then back to China, is covered by Export Administration Regulations, according to a court filing.

This lawsuit is the latest example of the ongoing conflict between the US government and Huawei. The tussle between Huawei and the US Government is at its peak due to the blacklisting of Huawei by the United States.

The United States has also deprived Huawei of Google’s Android updates. However, the 90 day reprieve has given some relief to the Chinese smartphone manufacturing company.

According to the United States government, the telecommunications gear of Huawei could be used by the Chinese government to spy against the US. However, the Chinese company has strictly rejected these allegations.

Huawei, the largest Chinese smartphone manufacturing company, said in the lawsuit that it shipped a computer server, ethernet switch and other telecom equipment from China to a testing lab in California. According to the lawsuit, Huawei didn’t apply for an export license as it was not required as per the Export Administration Regulations of America.

The equipment was then seized by the US government in Alaska while it was being shipped back to China from California. It was seized by the American officials who were investigating whether the equipment required an export licence for shipping to China. Although it was seized back in September 2017, there is yet to be a decision regarding the fate of the seized telecommunications gear i.e. whether or not it requires a license for shipping, the lawsuit claims.

“The equipment, to the best of HT USA’s knowledge, remains in bureaucratic limbo in an Alaskan warehouse,” Huawei said in its lawsuit.

When requested to comment, the US Department of Commerce’s spokesman did not respond immediately.

Huawei, in its lawsuit, argues that the telecommunications gear does not need a license because it is not included in the controlled category of goods. Furthermore, the equipment was not manufactured within the United States and it was shipped back to the country from where it came for testing purposes.

Huawei pleaded for the immediate release of the seized equipment or for the decision of US Department of Commerce to declare the shipping of telecommunications gear as illegal. The Chinese company is waiting for the decision of the Commerce Department even after the lapse of almost 2 years. “Defendants have neither made a licensing determination for the equipment nor even indicated” when that decision will be made, Huawei said in the lawsuit.

Huawei said that the telecom equipment was sent to California in July 2017. The shipping was made under the strict control of the executives of the US unit of Huawei and Huawei provided all the information about the equipment which was demanded by US officials. Under the Export Administration Regulations of the United States.The telecommunications gear did not require an export license at the time of shipping, the lawsuit claims.

Huawei’s lawyers pleaded that officials of the US Department of Commerce have been sitting on their hands for 20 months and they have not yet decided the fate of the telecommunications equipment. Huawei requested the court to find that the United States Government “unlawfully withheld or unreasonably delayed agency action” on the seized telecommunications gear.

In May 2019, the United States government added Huawei to the entity list, stopping it from purchasing required US items and software without the prior approval of the government of the United States. United States President, Donald Trump, has offered that the U.S. can resolve the complaints regarding Huawei as part of a trade deal with China.

Meng Wanzhou, daughter of Huawei’s founder, has been in custody in Canada since December 2018 on a request by United States prosecutors. Meng, who is also the chief financial officer of Huawei, has been detained by the Canadian authorities on charges of misleading the global banks regarding the relationship between Huawei and a company based in the Islamic Republic of Iran, which is a clear violation of US sanctions on Iran. However, Meng terms these allegations by the US as politically-motivated.

Shortly after the detention of Meng, China detained two Canadian citizens, charging them with espionage.