Could Targeting China’s Huawei Be Trump Administration’s 1st Cuba Policy Action?
U.S.-Cuba Trade and Economic Council By:
- Sanctioning Huawei Of China May Be First Strike By Trump Administration Towards Cuba
Shenzhen, People’s Republic of China-based Huawei Technologies Co. Ltd. (2016 revenues exceeded US$75 billion) is a global networking and telecommunications equipment and services company comprised of three operating groups: Carrier, Enterprise, and Consumer.
The company, which has its United States headquarters in Plano, Texas, is the world’s second-to-third-largest manufacturer of cellular telephone equipment and has substantial revenue streams from exports of products and services to the United States.
In 2017, the company received a subpoena from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, DC.
In 2016, the company received a subpoena from the Bureau of Industry and Security (BIS) of the United States Department of Commerce in Washington, DC.
The subpoenas focused on technology transfer activities (and potential military/civilian dual-use issues) by the company in the Republic of Cuba and Iran, Sudan, and Syria during the last five (5) years.
The investigation of Huawei Technologies Co. Ltd. commenced during the Obama Administration and has continued during the Trump Administration.
There have been no reported efforts by the Trump Administration to interrupt the investigation begun by career staff at the BIS and the OFAC.
The Trump Administration may use the potential impact of financial (which could exceed US$2 billion) and United States market-access (most significant) penalties against Huawei Technologies Co. Ltd. as a means to obtain assistance from the government of the People’s Republic of China on issues relating to North Korea and, perhaps, relating to the Republic of Cuba.
The government of the People’s Republic of China may seek relief from any penalties upon Huawei Technologies Co. Ltd. relating to the Republic of Cuba as a condition for supporting Trump Administration efforts relating to North Korea.
Members of the United States Congress and individuals within the Trump Administration (The White House, United States Department of the Treasury, United States Department of State, United States Department of Justice and United States Department of Defense) have an interest in requiring the government of the People’s Republic of China to lessen its support for the Republic of Cuba in return for any relief to Huawei Technologies Co. Ltd.
Any adverse decision impacting the relationship between Huawei Technologies Co. Ltd. and its access to the Republic of Cuba marketplace will unlikely result in commensurate opportunities for United States-based companies. Other People’s Republic of China-based companies and those located in Japan and in South Korea would be the expected beneficiaries.
If there are restrictions imposed upon Huawei Technologies Co. Ltd., the government of the Republic of Cuba would not be expected to disrupt roaming or service agreements with New York, New York-based Verizon; Dallas, Texas-based AT&T; Overland Park, Kansas-based Sprint; Bellevue, Washington-based T-Mobile, and Newark, New Jersey-based IDT Corporation; or the server installation and operation agreement (donation) with Menlo Park, California-based Google.
See 19 February 2016 Blog Post:
From 20 January 2016 to 22 January 2016, The Honorable Daniel Sepulveda, Deputy Assistant Secretary of State and U.S. Coordinator for International Communications and Information Policy led an official fourteen-member delegation to the Republic of Cuba which included The Honorable Thomas Wheeler, Chairman of the Federal Communications Commission (FCC) and FCC staff, representatives from the OFAC, and according to Deputy Assistant Secretary Sepulveda, representatives of “academia, and the private sector.”
The names of the non-United States government participants have not been disclosed by the United States Department of State. The Washington, DC-based Information Technology Industry Council confirmed that its president, Mr. Dean Garfield, participated in the delegation “led by the U.S. Ambassador and Deputy Assistant Secretary of State for International Communications and Information Policy Daniel Sepulveda.” Other private sector participants included representatives of California-based Cisco Systems, Pennsylvania-based Comcast, Sweden-based Ericsson (North American Headquarters in Plano, Texas).
From one private sector participant on 28 January 2016: “The trip was an official U.S. delegation visit by the State Department, and [redacted] was invited to join as part of the delegation. I can find a point of contact to pass along at the State Department who can answer your questions since they organized the trip.”
From Chairman Wheeler on 27 January 2016: “Ambassador Daniel Sepulveda from the State Department led our delegation which also included representatives from the Department of the Treasury as well as representatives of the technology community. The inclusion of the private sector in the talks advanced the dialog with real life examples of what was possible.”
On 1 February 2016, Republic of Cuba government-operated Empresa Nacional de Telecomunicaciones de Cuba S.A. (ETEC S.A.) reported that it would install broadband services within the area of Old Havana using equipment sourced from Shenzhen, People’s Republic of China-based Huawei Technologies Co Ltd. (2015 revenues exceeded US$28 billion). On 6 November 2015, Huawei Technologies Co Ltd. Reported an agreement to market mobile devices, parts, accessories and to train repair personnel. The government of the People’s Republic of China has extended substantial financial credits to the government of the Republic of Cuba.
A challenge for United States-based communications/telecommunications companies and the United States government is how to answer the following inquiry from the Ministry of Communications of the Republic of Cuba: “If we purchase your equipment, how do we know the equipment will not be compromised before it arrives or have an ability to be compromised from abroad after its installation? Will you augment the specifications of equipment so we may monitor all voice, text, data and email traffic flowing through the equipment?”