The New York Times reports -- citing a subpoena the paper has seen -- that the US Treasury Department's Office of Foreign Assets Control is looking into whether Huawei Technologies Co. Ltd. broke American trade controls on Cuba, Iran, Sudan and Syria. Huawei's Chinese rival ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) was fined $892 million by the government this March for breaking American trade rules by selling products that use US components in Iran. (See ZTE to Pay $892M Fine to Settle US Trade Dispute.)
Huawei has not been accused of any misdemeanors yet, but an ongoing probe into its business is not good news for the vendor.
Huawei does not have a significant infrastructure business in the US, having been cited in October 2012 as a security risk by the US House Permanent Select Committee on Intelligence. Operators looking to win government contracts, therefore, avoid using the vendor's infrastructure. (See Surprise! Sprint Still Has Huawei in Its Network.)
Huawei, however, is now the world's third-largest handset vendor, even growing in the US with a Google Nexus device, which is sold as an unlocked device not tied to any carrier. If -- as the NY Times reports -- the US government could stop Huawei using US components such as modems in its devices, that could really cramp Huawei's smartphone style. (See Google Gives Huawei a US Device Boost .)
— Dan Jones, Mobile Editor, Light Reading