China’s Huawei Sues US Government
On March 7, 2019, Huawei announced through a press release, that the company has filed a lawsuit in a U.S. District Court in Plano, Texas in the US that challenges the constitutionality of Section 889 of the 2019 National Defense Authorization Act (NDAA).
According to the complaint, Section 889 of the 2019 NDAA not only bars all U.S. Government agencies from buying Huawei equipment and services but also bars them from contracting with or awarding grants or loans to third parties who buy Huawei equipment or services, without any executive or judicial process. This violates the Bill of Attainder Clause and the Due Process Clause. It also violates the Separation-of-Powers principles enshrined in the U.S. Constitution, because Congress is both making the law, and attempting to adjudicate and execute it.
Through this lawsuit, Huawei seeks “a declaratory judgment that the restrictions targeting Huawei are unconstitutional and a permanent injunction against these restrictions”.
“The U.S. Congress has repeatedly failed to produce any evidence to support its restrictions on Huawei products. We are compelled to take this legal action as a proper and last resort,” Guo Ping, Huawei Rotating Chairman said. “This ban not only is unlawful but also restricts Huawei from engaging in fair competition, ultimately harming U.S. consumers. We look forward to the court’s verdict, and trust that it will benefit both Huawei and the American people.”
The west is very much suspicious about Huawei’s engagement with the Chinese government. Especially, after the passing of a Chinese law by the National People’s Congress in November 2017, that mandates cooperation of Chinese individuals and entities in the intelligence work of the state. Article 7 of the National Intelligence Law of the People’s Republic of China states that “All organizations and citizens shall, in accordance with the law, support, cooperate with and collaborate in national intelligence work.” and Article 12 notes that state intelligence agencies may “establish cooperative relationships with relevant individuals and organizations, and entrust them to undertake relevant work.”
Song Liuping, Huawei’s Chief Legal Officer, stressed, “Section 889 is based on numerous false, unproven, and untested propositions. Contrary to the statute’s premise, Huawei is not owned, controlled, or influenced by the Chinese government. Moreover, Huawei has an excellent security record and program. No contrary evidence has been offered.”
According to Arjun Kharpal, CNBC’s senior technology correspondent based in Guangzhou, China, “The federal district court where the lawsuit is filed will make a decision on whether Huawei’s lawsuit will hold. Either side — Huawei or the U.S. government — can appeal that decision. A court has the power to invalidate a part of legislation without ripping apart the entire law. So, in theory, Huawei could get Section 889 thrown out.”
Trade pundits, as well as geopolitical watchers, are finding a lot of similarities between Huawei’s lawsuit with two lawsuits filed by Moscow-based Kaspersky Lab in December 2017. The company filed the lawsuits as part of a campaign to refute allegations that it was vulnerable to Kremlin influence, which had prompted the U.S. government bans on its products in September 2017. The ban was later ratified in law.
In parallel to current development, Germany, the United Kingdom, and India are mulling over the kinds of restrictions to impose on Huawei equipment. In 2018, Australia took the first step in banning the company from providing technology for its 5G networks.
Also, Meng Wanzhou, Huawei’s chief financial officer (and the daughter of the company’s founder) is facing extradition proceedings in Canada where she was arrested in December 2018 at the request of the US. Meng faces charges in the US of bank fraud and violating US sanctions on Iran. In response to that, Chinese authorities detained two Canadians, a former diplomat, and a businessman, accusing them of endangering the country’s national security.
