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Huawei is one of China’s most important tech companies — here’s what it does and why the U.S. government is wary Huawei’s CFO was arrested Saturday, potentially in relation to violating sanction laws against Iran. Huawei builds phones, TVs, laptops and more, but has come under scrutiny from the global community recently. The U.S. and other governments worry Huawei’s technology can be used to help the Chinese government spy. Published 12:35 PM ET Thu, 6 Dec 2018 Updated 1:23 PM ET Thu, 6 Dec 2018 CNBC.com Marlene Awaad | Bloomberg | Getty Images An attendee inspects a P20 Pro smartphone, manufactured by Huawei Technologies, during its unveiling in Paris, France, on Tuesday, March 21, 2018.
Huawei CFO Meng Wanzhou is under arrest in Vancouver and may soon be extradited to the United States to face charges for violating U.S. sanctions that prevent Huawei from selling equipment to Iran.
Huawei is a major global technology company, but it isn’t as well known in the U.S. since most of its products aren’t sold there.
Here’s a quick briefing on what you need to know. What does Huawei do?
Shenzhen-based Huawei (pronounced: wah-way )is the world’s second largest seller of phones behind Samsung, according to IDC . It’s best known for making high-end phones with appealing designs and premium hardware features that rival devices from Samsung and Apple .
While global consumers — especially those in China — may know the brand best for its consumer electronics, which also include laptops, tablets and TVs, Huawei’s history is in providing telecommunications equipment. Put simply, Huawei also sells some of the hardware that lets your phone connect to wireless networks.
It used to sell gear to U.S. wireless carriers, too, but that ended more than a decade ago. More on that next. Spying concerns
Back in 2012, U.S. lawmakers began to work to prevent American wireless carriers from buying equipment from Huawei and ZTE , another Chinese company. The U.S. government was concerned about Huawei’s ties to the Chinese government and worried that equipment from both companies could eventually be a national security threat if it was deployed across the United States.
Those ties to the Chinese military begin with the CEO. Huawei’s founder, billionaire Ren Zhengfei, was an engineer in China’s People’s Liberation Army before he left the service in 1983 and started Huawei four years later. Huawei has always denied its equipment is any more vulnerable to spying than that provided by other companies.
Most recently, AT&T abandoned its plans to launch a Huawei flagship smartphone in the U.S. in January. The Information news site reported at the time that AT&T canceled the launch after the House and Senate Intelligence committees raised concerns over the partnership.
The U.S. isn’t the only country worried about Huawei’s potential ability to use its hardware for spying. Australia has banned its wireless carriers from using Huawei equipment for new 5G networks. The U.K.’s spy chief also raised concerns about Huawei earlier this week.
Finally, earlier this year the FBI, CIA and NSA warned U.S. consumers to avoid buying phones built by Huawei and its sub-brand “Honor” that were sold through retailers such as Best Buy and Amazon.
“We’re deeply concerned about the risks of allowing any company or entity that is beholden to foreign governments that don’t share our values to gain positions of power inside our telecommunications networks,” FBI Director Christopher Wray said in February.
“That provides the capacity to exert pressure or control over our telecommunications infrastructure,” Wray said. “It provides the capacity to maliciously modify or steal information. And it provides the capacity to conduct undetected espionage.” Sanctions
Huawei and ZTE have been accused in recent years of continuing to ship products to Iran despite U.S. sanctions for its nuclear program. The alleged violations include shipments of phones or other equipment that contain chips made by U.S. companies. Qualcomm and Broadcom have provided parts to Huawei in the past, for example. The United States began digging deeper into Huawei’s potential Iran sanctions violations in April, according to Reuters.
And that’s where we are now.
Huawei’s Meng was reportedly arrested on Saturday for ties to Huawei’s role in potentially violating the sanctions. However, neither the United States nor Canada, where she was arrested, have yet to publicly disclose charges against her.
“We have made solemn representations to Canada and the U.S., demanding that both parties immediately clarify the reasons for the detention, and immediately release the detainee to protect the person’s legal rights,” a foreign ministry spokesperson said on Thursday, according to BBC . show chapters