The story also notes “the 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.”
No further details are known. But the investigation could be similar to the case against ZTE, which ultimately resulted in ZTE having to pay a fine of $1.19 billion to the Commerce Department’s Bureau of Industry Security (BIS). And then, last week the Commerce Department found that ZTE had failed to comply with some of the terms of the sanctions case. And it forbade American companies from selling components to ZTE for seven years.
Huawei has suffered a lot of bad news this year, stifling its ability to grow its U.S. business. But this investigation by the Justice Department could have even worse consequences. Similar to the situation with ZTE, penalties and fines could potentially affect its business in other countries.
“As with our analysis of last week’s ZTE situation, we see Ciena, Infinera, and possibly Nokia as potential winners from any incremental sanctions against Huawei,” writes Jefferies analyst George Notter in a research note about the optical equipment ecosystem. “Ciena and Infinera, of course, compete with both Huawei and ZTE in international markets (except China).”