MIT cuts ties with Huawei, ZTE, cites federal investigations

It seems MIT wants to stay well away from the trade investigations and court cases swirling around the Chinese companies.
Written by Charlie Osborne, Contributing Writer

The US Massachusetts Institute of Technology (MIT) has axed collaborative ties with Huawei and ZTE over US federal investigations currently underway relating to the alleged violation of sanctions.

Richard Lester, MIT's Head of the Department of Nuclear Science and Engineering, and Maria Zuber, Vice President for Research at MIT and a member of the National Science Board, published an open letter revealing the decision on Wednesday

The MIT leaders said the academic institution has introduced a new review process for "certain international collaborations."

"MIT faculty naturally and enthusiastically seek out international projects and collaborators," Lester and Zuber said. "Because these relationships can present a distinctive set of risks and questions, MIT has long had processes for identifying such issues for any given project."

Due to this risk assessment, MIT has decided to not accept "new engagements" with either Huawei or ZTE -- or their subsidiaries -- due to current federal investigations underway over alleged sanction violations.

Projects involving MIT staff or students, as well as collaborative initiatives with researchers from the companies, all come under the umbrella of the review process.

"Special attention will be paid to risks related to intellectual property, export controls, data security and access, economic competitiveness, national security, and political, civil and human rights, as well as potential impacts on the MIT community, consistency with MIT's core values, and alignment with MIT's academic mission," the letter reads.

The companies, both of which are headquartered in Shenzhen, China, will be impacted by the cuts effective immediately. Lester and Zuber added that partnerships with China, Hong Kong, Russia, and Saudi Arabia will all be investigated over risk factors.

"The institute will revisit collaborations with these entities as circumstances dictate," the MIT leaders said.

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Huawei's CFO Meng Wanzhou, who is also the daughter of company founder and president Ren Zhengfei, was arrested in December by Canadian authorities on behalf of the US. Now awaiting extradition from Canada, Wanzhou has been named in a federal case relating to the violation of Iran trade sanctions.

A pair of indictments, unsealed in January 2019, alleges that Wanzhou concealed Huawei's relationship with Iran's Skycom, an affiliate of the company, and Huawei itself also conspired to steal trade secrets from T-Mobile.

The US claims that Huawei "sold Skycom to itself" in order to circumvent the US' sanctions on Iran and remain compliant -- at least on the surface. However, the alleged sale was false. Wanzhou is also charged with lying to banks about the nature of the relationship between Huawei and Skycom.

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Huawei also allegedly obstructed investigators by lying to the US government, whisking potential witnesses back to China, and by hiding and destroying evidence related to the case.  

Huawei has pleaded not guilty to the allegations made by US prosecutors relating to the theft of trade secrets from T-Mobile during 2012 and 2014. The company allegedly offered staff bonuses for the successful theft of intellectual property.

ZTE, too, faces pressure from the United States over sanctions. President Trump lifted a ban on the export of ZTE products in July 2018, permitting the Chinese firm to resume business after the original penalty effectively crippled the company.

The administration had previously concluded that ZTE violated trade sanctions by illegally shipping US equipment to Iran and North Korea.

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A bill has since been introduced by senators to reintroduce the ban should ZTE fail to live up to current trading standards.

In March, Republicans proposed the US Protect Our Universities Act, which would establish a task force overseen by the Department of Education to monitor "sensitive" research projects at academic institutions to prevent surveillance or theft.

Foreign students involved in sensitive work would be monitored under the rules, and any student with past or current citizenship in China, Russia, Iran, or North Korea would not be allowed to participate unless granted a special waiver.

ZDNet has reached out to Huawei and ZTE and will update if we hear back. 

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