Huawei Appeals Against 'Unlawful' US Subsidy Ban

Daniel Fowler
December 5, 2019

Huawei, which also filed a legal challenge against the United States government earlier this year, has argued that Washington has not provided the firm with an opportunity to raise an objection and that the decision-making process is unclear and lacks accountability. The order "exceeds the FCC's statutory authority and violates federal law, the Constitution, and other laws", the company said in its filing (see below).

The Huawei document was not yet available in the U.S. court filing system.

The move is the latest in a series of challenges between Huawei and the US.

Huawei argues that the US ban doesn't provide any proof to support its claims of "backdoor access" or "national security threat".

FCC Chairman Ajit Pai said at the time that Huawei and ZTE were chosen as ban targets because they "have close ties to China's Communist government and military apparatus".

The company has asked the US Court of Appeal to overturn the decision.

"These politicians ignore an important fact: Huawei has been working with rural U.S. carriers for many years, and our customers trust our equipment", Huawei Chief Legal Officer Song Liuping said, according to a transcript posted by Huawei.

The FCC argued the companies' ties to China's government and military apparatus, and Chinese laws requiring that such companies assist the Chinese government with intelligence activities, pose a USA national security risk.

"This is our opportunity to use one of the legally permissible mechanisms to try to block the United States government from the carpet bombing of Huawei in the United States and trying to destroy us around the world", Andy Purdy, chief security officer at Huawei USA, told CNBC.

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The FCC ban will take effect upon being published in the Federal Register and will initially affect future projects paid for by the USF and the use of federal funding to maintain existing equipment.

The FCC didn't immediately respond to a request for comment.

Huawei's legal counterpunch is part of a multimillion dollar public relations and lobbying campaign by the company.

The Chinese telecom giant claims the move is in violation of the US constitution, and is politically motivated.

"The primary benefit to Huawei will be a possible delay in the implementation of the FCC rule", Julian G. Ku, distinguished Professor at Maurice A. Deane School of Law at Hofstra University, said.

The US has already banned federal agencies from buying products from Huawei and four other Chinese firms. Huawei's chief financial officer, Meng Wanzhou also faces fraud charges in NY. That case is still being deliberated.

The telecoms group that rode a wave of patriotic support a year ago when it was put on a trade blacklist by the United States is under growing pressure to make an apology.

It has a leading role in manufacturing and selling key technology for next generation 5G telecoms infrastructure.

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