Huawei fights against the US blackout with a lawsuit in Texas

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HONG KONG / WASHINGTON (Reuters) – Chinese telecommunications equipment maker, Huawei Technologies, sued the US government on Thursday saying that a law restricting US business was unconstitutional, increasing its fight against 39. the government's inclination to close it off global markets.

Huawei said it had filed a complaint in a federal court in Texas challenging Section 889 of the National Defense Authorization Act (NDAA), signed in law by US President Donald Trump in August, which prevents federal agencies and their contractors from obtain its equipment and services.

The cause marks the last clash between China and the United States, which spent most of 2018 by slapping the import tariffs for billions of dollars of the value of the goods of the other. The year ended with the arrest of Huawei's Chief Financial Officer (CFO) in Canada at the request of the United States, much to the dismay of China.

Long before Trump commenced the commercial war, Huawei's activities were under review by the US authorities, according to interviews with 10 people familiar with Huawei's probes and documents related to investigations seen by Reuters.

"The US Congress has repeatedly failed to provide evidence to support its restrictions on Huawei products, and we are forced to take this legal action as a real and last resort," said Huawei Rotating chairman Guo Ping in a statement.

"This ban is not only illegal, but also limits Huawei to engage in fair competition, ultimately damaging US consumers." We look forward to the court's verdict. "

While Huawei had a very small share of the US market ahead of the bill, it is the world's largest telecommunications gear maker and is looking to be at the forefront of the global introduction of fifth generation mobile networks and services ( 5G).

In his case, Huawei claimed that its "equipment and services are subject to advanced security procedures and that no backlog, prosthesis or other intentional security vulnerabilities have been documented in any of the more than 170 countries in the world where equipment is used. Huawei services ".

The private company has embarked on a public report and a legal offensive when Washington allies with its allies to abandon Huawei when it builds 5G networks, focusing on a 2017 Chinese law that requires companies to collaborate with national intelligence work.

"The US government does not spare any efforts to smear the company and deceive the public," Guo said at a press conference at Huawei's southern China headquarters.

"NO EVIDENCE"

The NDAA prohibits the United States government from engaging in business with Huawei or its compatriot ZTE Corp or from engaging in business with any company that has the equipment of the two companies as a "substantial or essential component" of its system.

In its lawsuit filed in the US District Court in eastern Texas, Huawei claims that the section in question is illegal because it could severely limit the company's ability to do business in the United States, despite no evidence of irregularity.

The lawsuit also claims that Huawei has been denied the due process and that Congress, depriving Huawei of commercial opportunities, has violated the "separation of powers" part of the constitution by doing court work.

Chinese Foreign Ministry spokesman Lu Kang said he had no information that the Chinese government could even seek legal action against this US law, but added that Huawei's move is "totally reasonable and totally understandable ".

The logo of the Huawei brand is visible above a shop of the telecommunications equipment manufacturer in Beijing, China, on March 7, 2019. REUTERS / Thomas Peter

UPHILL BATTLE

Some legal experts, however, have stated that Huawei's lawsuit will probably be rejected because US courts are reluctant to consider national security decisions from other branches of government.

The lawsuit "will be an uphill battle because Congress has broad authority to protect us from perceived national security threats," said Franklin Turner, a McCarter & English government contract lawyer.

In November 2018, a federal appeal court dismissed a similar lawsuit filed by Russian computer security company Kaspersky Lab, which contested the ban on using its software in US government networks.

The Texas court that heard Huawei's case will not be bound by this decision, but will probably adopt its reasoning because of similarities in the two disputes, said Steven Schwinn, a professor at the John Marshall Law School in Chicago.

"I do not see how (Huawei) can really escape this result," said Schwinn.

Huawei's chief legal officer, Song Liuping, said the two cases were different in terms of evidence and scope and that the Chinese company's case had "complete merits".

If a judge decides that Huawei has a plausible request, the case will proceed to the discovery phase, where internal documents are shared and US government officials may be forced to provide testimony and present their security concerns.

REMUNERATION

The legal action confronts a more moderate response in December, emphasizing "trust in justice" after the arrest of CFO Sabrina Meng Wanzhou.

A man enters a Huawei store in Beijing, China, on March 7, 2019. REUTERS / Thomas Peter

The founder of Huawei, Ren Zhengfei, said that the arrest of Meng was politically motivated and "not acceptable".

Meng – Ren's daughter – is accused by the United States of banking and telematic fraud linked to violations of trade sanctions against Iran. Canada approved the extradition proceedings on March 1, but Meng denounced the Canadian government for procedural wrongings in his arrest. The next hearing is scheduled for May 8th.

The case has put a strain on Canada's relations with China, which this week accused two Canadians arrested for stealing state secrets and stopping Canadian canola imports.

Meng is under house arrest in Vancouver. It is not clear where the two Canadians are detained in China, and at least one does not have access to legal representation, sources previously told Reuters.

Reporting by Sijia Jiang to HONG KONG and Jan Wolfe to WASHINGTON; Additional reports by Twinnie Siu in HONG KONG, Ben Blanchard in BEIJING and Diane Bartz in WASHINGTON; Editing by James Pomfret and Christopher Cushing

Our standards:The principles of Thomson Reuters Trust.

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