U.S. universities cut ties work with Huawei, ZTE amid federal charges

by Kim Boateng Posted on April 5th, 2019

Universities in the U.S. are cutting ties with Chinese tech giant Huawei as the company faces allegations of bank fraud and trade secret theft. The Massachusetts Institute of Technology told its faculty Wednesday it won’t accept new deals with the company or renew existing ones in light of recent federal investigations.

It follows similar decisions at Princeton University and the University of California, Berkeley, which said they have suspended work with the company. The U.S. Justice Department in January accused Huawei of violating U.S. trade sanctions with Iran and also of stealing technology from T-Mobile. Huawei pleaded not guilty in both cases.

Federal data from the Education Department show that Huawei has given more than $10.5 million to U.S. colleges and universities as gifts or contracts since 2014.

Massachusetts Institute of Technology is ending its funding ties with Chinese telecoms giants Huawei and ZTE, citing the risks of such arrangements in the light of US federal investigations of the two companies.

MIT’s move is the latest in a series of blows to the Chinese telecoms giants, both of which have struggled in the face of high-level opposition to their activities in the US market.

Lawmakers allege that the equipment they sell – key components in mobile phone network infrastructure – could become cybersecurity threats.

The announcement by the prestigious academic institution – rated third in the US News and World Report’s ranking of American universities – follows similar moves by Stanford, the University of California, Berkeley and the University of Minnesota, which have all cut future research collaborations with Huawei.

“At this time, based on this enhanced review, MIT is not accepting new engagements or renewing existing ones with Huawei and ZTE or their respective subsidiaries due to federal investigations regarding violations of sanction restrictions,” Richard Lester, MIT’s associate provost, and Maria Zuber, the school’s vice-president for research, said in a letter to faculty on Wednesday.

MIT is cited in a 2017 Huawei presentation as a collaborator in the Huawei Innovation Research Program, which the company calls a global initiative “to identify and support world-class, full-time faculty members pursuing innovation of mutual interest.”

Queries sent to MIT outside regular business hours asking for details of research collaboration between the university and Huawei and ZTE were not immediately answered. Emails and phone calls to MIT over the past two months, asking specifically about the university’s involvement in the research program and its relationship with Huawei, have also not been answered.

Huawei has been making headlines recently owing to Canada’s arrest of Sabrina Meng Wanzhou, its chief financial officer and the daughter of company founder Ren Zhengfei, at Washington’s request.

In the US, Meng and the company face a number of criminal charges, including bank fraud and theft of technology. An extradition hearing is underway.

A year ago, the US Department of Commerce activated a seven-year exports ban on ZTE, bringing the company to its knees by denying it access to vital US components and services, after accusations that the company covered up its sales to Iran, in violation of US sanctions against that country.

The ban was lifted after the company agreed to pay more than $1 billion to the US Department of Commerce and penalize the workers involved in the cover-up.

MIT said its decision was part of a broader effort to strengthen its vetting of research partners.

“Most recently we have determined that engagements with certain countries – currently China, Russia and Saudi Arabia – merit additional faculty and administrative review beyond the usual evaluations that all international projects receive,” the letter to staff said.

In a statement, Huawei said it is “disappointed by MIT’s decision, but we understand the pressure they’re under at the moment.” ZTE declined to comment.

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