TECH

Huawei Under Criminal Investigation Over Iran Sanctions

Washington’s broader assault on Huawei has already exacerbated tensions with Beijing

The Huawei logo is seen during the Mobile World Congress in Barcelona earlier this year.

WASHINGTON—The Justice Department is investigating whether Huawei Technologies Co. violated U.S. sanctions related to Iran, according to people familiar with the matter—opening a new avenue of scrutiny amid wider national-security concerns over the Chinese cellular-electronics giant.

It’s unclear how far the Justice probe has advanced and what specific allegation federal agents are probing. A Huawei spokesman declined to comment.

Such a probe raises the stakes for Huawei, which is facing a series of moves by Washington to diminish its already-limited business dealings in the U.S. It could also have knock-on effects for its much larger business overseas, particularly in Europe.

Amid the heightened scrutiny in Washington, some allied countries, where Huawei has big business, have grown more wary.

Washington’s broader assault on Huawei has exacerbated tensions with Beijing, already wrangling with the U.S. over trade. The Trump administration has also recently cited Huawei, the world’s largest maker of cellular-tower electronics and other telecommunications equipment, as a threat to American leadership in the race to develop the future of mobile communication. Hauwei is also the world’s No. 3 maker of smartphones, behind Apple Inc. and Samsung Electronics Co.

The criminal investigation into Huawei follows administrative subpoenas on sanctions-related issues from both the Commerce Department and the Treasury Department’s Office of Foreign Assets Control, according to these people.

The Justice Department’s interest hasn’t been previously reported, and the existence of a criminal probe represents a more serious level of potential misconduct. The Commerce and Treasury departments can impose administrative penalties and regulatory sanctions on the company.

If investigators conclude the company intentionally violated U.S. export laws, however, Huawei could face additional criminal penalties, the imposition of a corporate monitor or the prosecution of individuals who may have been involved in the alleged illicit activity, among other potential consequences.