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Huawei’s North Korea 3G collaboration likely violated sanctions & export laws, experts say

Huawei Canada. (Raysonho/Wikimedia Commons)
July 24, 2019

This article was originally published by Radio Free Asia and is reprinted with permission.

A report this week by The Washington Post showing how the Chinese tech giant Huawei Technologies Co. secretly helped the North Korean government build the country’s commercial wireless network points to sanctions and export control law violations and underscores the depth of Beijing-Pyongyang ties, analysts say.

The Post, citing spreadsheets and other internal documents obtained from a former Huawei employee, reported on Monday that Huawei partnered with a Chinese state-owned firm, Panda International Information Technology Co. Ltd., on a variety of North Korea projects over at least eight years.

“Taken together, the revelations raise questions about whether Huawei, which has used American technology in its components, violated U.S. export controls to furnish equipment to North Korea, where the isolated regime has faced extensive international sanctions over its nuclear weapons program and human rights abuses,” said the U.S. daily.

The newspaper published a statement from the company that said ““Huawei is fully committed to comply with all applicable laws and regulations in the countries and regions where we operate, including all export control and sanction laws and regulations” of the United Nations, United States and European Union.

Analysts told RFA’s Korea Service that the Huawei transactions in North Korea revealed in The Post report point to likely violations of international sanctions implemented under U.N. auspices to curb Pyongyang’s nuclear weapons and missile programs. Sales to North Korea of equipment containing U.S.-origin components would also violate U.S. export control laws.

“Much of this appears to have occurred before the major implementation of UNSC sanctions. But given Huawei dependence on US semiconductors, there is a fair possibility that Huawei violated U.S. export control laws,” said Robert Manning, a senior fellow at the Atlantic Council.

“In any case, this disclosure complicates U.S.-China relations, as the fate of Huawei is a major element in current U.S.-China trade talks,”

In May, the U.S. Commerce Department added Huawei and nearly 70 affiliates to its prohibitive “entities list” of companies that pose a threat to the nation, based on the possibility that its products could be used for surveillance. Huawei, at the center of a U.S. trade war with China, has denied that it poses a security threat.

“It looks like there was a possible violation of sanctions here — though that is still unclear and perhaps something unable to be proven (as Huawei appears to be denying everything),” said Bruce Bechtol, a former intelligence officer at the Defense Intelligence Agency who is now a professor at Angelo State University in Texas.

“But the sales of this type of technology and equipment to North Korea is a violation of sanctions.  If it can be proven, the United States is likely to take further action,” he said.

“It also shows that Chinese companies remain willing and able to do business with North Korea, while at the same time attempting to keep it as low key as possible and avoiding any negative publicity in the West,” added Bechtol.

RFA sought comment by telephone and e-mail from the Chinese embassy in Washington, the U.S. Department of Justice and other agencies and received no reply.

The US Department of Commerce and the Treasury Department declined to comment.

A U.S. Department of State official said the agency was aware of the report but said “we are not going to comment on its veracity.”

“Huawei has long conducted business with malign foreign actors,” the state department official said.

“Earlier this year, Huawei was indicted for its duplicitous activity to evade sanctions against Iran.  As we have repeatedly stated, we believe there are significant risks to doing business with Huawei,” added the official.

Huawei is one of the world’s leaders in smartphone production and a top telecom provider of 5G networks, which analysts believe will transform society through high data transmission rates that can power self-driving cars, support remote surgery, and create smart cities that optimize the use of resources.

But in addition to blacklisting the firm over fears its technology could be coopted by the Chinese government for surveillance purposes, the U.S. is pushing other nations to also ban the telecom provider.

“Considering the fact Huawei already broke U.S sanctions law in conducting business with Iran, it is long past time to wall off American networks from this rogue firm,” said Harry Kazianis, director of Defense Studies at the Center for the National Interest. He said the report on Huawei helping North Korea “clearly shows it will do business with anyone.”

“Simply stated, they should be permanently banned from selling any new telecom equipment in the U.S, nor should we sell them any technology to help them sell their good to anyone else,” he told RFA.

Reported by Rhee Kyung-ha and Kim So-young for RFA’s Korean Service. Written by Paul Eckert.