BIS, DOJ Investigating Telecom Supplier for Violating Export Controls on Huawei
The Bureau of Industry and Security and DOJ are investigating U.S. mobile phone parts producer Lumentum for potentially violating U.S. export controls on shipments to Huawei, according to corporate filings.
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Lumentum submitted a voluntary self-disclosure to BIS after an “internal review” last year revealed that it may have shipped export-controlled items to Huawei without a license, Lumentum said in an SEC filing Friday. The company said it received a subpoena from BIS in August that asked for its Huawei-related business records, and it received a similar subpoena from DOJ soon after. Lumentum is cooperating with both agencies “and their ongoing reviews,” the company said.
The shipments may have violated restrictions outlined in an August 2020 BIS final rule that expanded export controls against the major Chinese telecommunications company, Lumentum said, including under the agency’s foreign direct product rule. Those measures broadened the scope of foreign-produced items subject to BIS licensing requirements when Huawei is involved in the transaction.
Lumentum said it stopped all its Huawei shipments, which it called its “largest networking customer in China,” at the beginning of 2024, but said BIS controls may have caught some past shipments. It added that it can’t “be certain what additional actions the U.S. government may take with respect to Huawei or other entities in China or other countries, including additional changes to the Entity List restrictions, export regulations, tariffs or other trade restrictions” that could affect its business. Lumentum said some of its customers have been added to the Entity List in recent years, further hurting its sales.
“Under the current regulatory regime, our business with Huawei has been significantly more limited than it was in the past, and is now completely restricted,” the company said. It also said “trade and export uncertainty has caused and may in the future cause” order delays or cancelations. Lumentum added that it is “unable to predict the likely outcome of these matters.”
Spokespeople for BIS and DOJ declined to comment.
BIS is also probing Taiwan Semiconductor Manufacturing Company for a possible breach of export controls against Huawei, and it issued a record $300 million penalty against Seagate Technology in 2023 after BIS said it violated Huawei-related foreign direct product rule restrictions.