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China's Huawei sues US over federal ban on its products

09 March 2019

The company's chief financial officer, Meng Wanzhou, is fighting extradition to the United States after she was arrested in Vancouver, Canada on December 1.

U.S. President Donald Trump has said he'd intervene in the case if it would help secure a trade deal with Beijing.

US officials and members of Congress have argued that Huawei is obliged to turn over data to the Chinese government under Chinese law and could be compelled to install hidden malicious code - an argument that formed the basis of the procurement ban written into the spending law's Section 889. "We are compelled to take this legal action as a proper and last resort", said Huawei's Rotating Chairman Guo Ping in the statement. Its strategy for the USA is to argue that its government's actions in restricting Huawei's activities violate the country's own laws and even its written constitution.

Huawei said it filed the lawsuit in the Eastern District Court in Plano, Texas where it has its United States headquarters.

While Huawei had very little share of the US market before the bill, it is the world's biggest telecoms gear maker and is seeking to be at the forefront of a global roll-out of fifth generation (5G) mobile networks and services.

The main basis for these fears is a perception that Huawei is linked to the Chinese government and that the use of the company's equipment risks the possibility of backdoors that could be used for espionage.

USA authorities "have hacked our servers and stolen our emails" but have presented no evidence to support their security claims, Guo said.

Washington continues to insist it views Huawei products as a potential security threat, arguing that the Chinese government can use the tech giant as a spying tool.

Huawei said the suit was filed in a US District Court in Plano, Texas, challenging a 2019 US defence bill that prevents US government agencies from buying the company's equipment and services, as well as working with third parties that are Huawei customers.

The lawsuit also alleges that Huawei has been denied due process and that Congress, by stripping Huawei of commercial opportunities, has violated the "separation of powers" portion of the constitution by doing the work of the courts.

According to the United States, equipment manufactured by Huawei is highly likely to be exploited by the Chinese Communist government in order to keep other countries under surveillance and interfere with crucial communications. The case was submitted Wednesday in the Eastern District of Texas, under whose jurisdiction Huawei's US headquarters falls.

Credit: ShutterstockHuawei's lawsuit specifically concerns a law passed by Congress past year, the National Defense Authorization Act, that singles out Huawei and ZTE.

This marks the second lawsuit Huawei has filed in North America in less than a week.

Told by reporters that many American firms feel they have been unfairly locked out of the Chinese market for years without recourse - one of the complaints lodged by us businesses in the current trade dispute - Song called China a country "governed by the rule of law" and encouraged those companies to take their complaints to Chinese courts.

After years of relatively meek responses to worldwide criticism, Huawei's lawsuit is part of a significantly stepped-up public relations and legal counteroffensive in recent months.

Huawei is increasingly in the crosshairs of the USA government and its allies, just as it's pushing for leadership in supplying fifth-generation wireless technology.

Meng and her legal team maintain that she's done nothing wrong. In the other half, the daughter of Huawei's founder is fighting extradition to the United States to face several criminal charges.

Meng faces a May 8 hearing in Vancouver, where she was arrested while changing planes.

Days earlier, Canada authorised a hearing for an extradition request, quashing Chinese hopes of a rejection on grounds that Meng's arrest was politically motivated. China has subsequently charged two Canadians with spying, a move that's largely seen as retaliation for Meng's detention.

China's Huawei sues US over federal ban on its products