China Tech Firm Huawei Sues Over US Security Law

SHERMAN, Texas (CN) – Chinese smartphone giant Huawei sued the United States on Wednesday night in the latest salvo in the countries’ trade dispute, claiming a government ban on its equipment is unconstitutional and there is no reason for security and spying fears.

A worker advertises the Huawei 5G internet phone in Shenzhen, Guangdong Province on Dec. 18, 2018. (AP Photo/Andy Wong)

The Shenzhen-based telecommunications manufacturer sued in Sherman, Texas, federal court, an hour north of Dallas. Its U.S. headquarters is in nearby Plano. Huawei is seeking a declaratory judgment that the restrictions of the 2019 National Defense Authorization Act are illegal, and an injunction against it.

Backed by President Donald Trump, the law bans all federal agencies from using Huawei products and bars them from awarding contracts or grants to contractors who use Huawei products.

Controlling 40 percent of the global market for network equipment, Huawei’s U.S. sales cratered after a congressional panel accused it and Chinese competitor ZTE Corp. of being security risks. The United States accounts for up to 25 percent of the global market for computer and telecommunications technology.

The law was passed in spite of Huawei’s insistence that is has never allowed the Chinese government to spy on data passing on its equipment and networks

Guo Ping, Huawei’s rotating chairman, said Congress had “repeatedly failed” to show any proof to support the ban. He accused Washington of “sparing no expense to smear” the company.

“We are compelled to take this legal action as a proper and last resort,” he said at a press conference announcing the lawsuit. “This ban is not only unlawful, but also restricts Huawei from engaging in fair competition, ultimately harming U.S. consumers. We look forwards to the court’s verdict, and trust that it will benefit both Huawei and the American people.”

Song Liuping, Huawei’s chief legal officer, told reporters the law is based on “numerous false, unproven and untested propositions” with no evidence of wrongdoing being shown.

“Contrary to the statute’s premise, Huawei is not owned, controlled or influenced by the Chinese government,” Luiping said. “Moreover, Huawei has an excellent security record and program.”

Huawei claims its presence in the American market would reduce wireless infrastructure costs by between 15 to 40 percent, saving North American over $20 billion in the next four years.

Huawei’s U.S. attorney, Glen Nager with Jones Day, explained the law violates the Constitution’s Bill of Attainder Clause, which prohibits laws that are both selective and imposes punishment.

“The complaint argues that Section 889 violates this constitutional proscription, because among other things, it selectively bars only Huawei (and one other entity) from providing certain products to the federal government, its contractors and federal loan and grant recipients,” he said in a statement. (Parentheses in original.)

The 54-page complaint claims the company’s due process rights are also being violated due to its liberty being “selectively” deprived.

“Section 889 violates the Vesting Clauses and the resulting separation of powers by legislatively adjudicating Huawei to be ‘guilty’ of an alleged connection to the Chinese government, and by implication a threat to U.S. security, rather than leaving it to the executive and the courts to make and adjudicate any such charges,” the complaint states.

The lawsuit comes two days after Huawei CFO Meng Wanzhou sued the Canadian government in British Columbia Supreme Court in Vancouver.  

She claims her December arrest and interrogation at Vancouver International Airport was unconstitutional. She faces extradition to the United States for allegedly participating in a scheme to get around U.S. trade sanctions against Iran.

Critics claim her case is politically motivated as Trump administration officials seek to reach a new trade agreement with China. Trump said in December he would be willing to intervene in Wanzhou’s case if it can help the negotiations.

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