It is true that American companies are enforcing laws against Huawei in China and seizing huge amounts of materials.

 It is true that American companies are enforcing laws against Huawei in China and seizing huge amounts of materials.

Geng Zhige learns from many people familiar with the situation that the well-known US listed OEM company with factories in Zhuhai and other places in China, Weichuangli, has privately seized up to 700 million yuan of materials and equipment from Huawei after the US government blacklisted the Chinese company.

But unlike previous media reports, Geng Zhiges exclusive revelation from people familiar with the matter shows that Flextronics did not return the materials and equipment when Huawei came to ask for them. Instead, it continued to seize Huaweis materials privately for more than a month, causing serious losses to Huawei.

They withheld more than 700 million yuan of Huaweis goods and refused to return them.

Earlier, some domestic media reported that after Huawei was blacklisted by the U.S. Department of Commerce on May 16 as an entity list, the world-renowned US-based factory Flextronics ceased all cooperation with Huawei for the first time, and the existing orders with Huawei were also included. Its over.

Later, some media reported that Huawei once dispatched nearly 100 trucks to Weichuangs factory in Zhuhai, where it pulled back its own equipment and materials. Then Huawei will eliminate its own supply chain from its overwhelming Flextronics company. It seems that this is the end of the matter.

_Pictures from the Internet

However, several people familiar with the conflict between Huawei and Flextronics told Geng that the conflict between the two companies is far less simple than the current media reports.

The fact is that Flextronics overinterpreted the U.S. governments export control laws and regulations and used them to seize up to 700 million yuan of Huaweis goods for more than a month, these people said. During this period, Flextronics not only refused to return the materials and equipment belonging to Huawei, but also made Huawei difficult, causing serious losses to Huawei, which made Huawei extremely angry at Flextronics such falling stone behavior.

According to these people, Flextronics is the worlds second largest manufacturer after Foxconn, headquartered in Singapore and California, the United States, before the incident with Huawei for several years, the relationship between the two sides has been good, the cooperation is also smooth, Huaweis agent partners Riho. Enterprises in the top 5.

According to data from Bloomberg News Agency, Flextronics earned about 2.4 billion yuan from Huawei in the third quarter of fiscal year 2018, making it the most profitable company among Huaweis U.S. suppliers. Flextronics earns about 5% of its total revenue from Huawei.

But since Huawei was included in the physical list of restricted access to U.S. technology and products by the Department of Commerces Industry and Security (BIS) on May 16, this companys long-standing partners immediately stopped all cooperation with Huawei in the global arena, including Flextronics in China and Substitution business for Huawei in Europe and other places.

Since Huawei and Flextronics are the feeding processing mode, that is, Huawei purchases the equipment and materials needed to be processed, and then delivers these own equipment and materials to Flextronics for processing, Huaweis production delivery has been greatly affected after Flextronics announced the cessation of all cooperation with Huawei. Continuing to fulfill its customerscontracts properly, Huawei had to decide to ship the remaining materials and its own equipment, which had previously been put in the Flextronics factory for production, out of the American factory.

Among them, Huaweis factories in Zhuhai have about 400 million yuan in materials and equipment, and overseas factories have about 300 million yuan. According to people familiar with the matter, these materials and equipment totaling more than 700 million yuan belong to Huaweis network equipment department, and there are more materials in the Flextronics factory in the mobile terminal department.

_Pictures from the Internet

The conflict happened here. According to these people, when Huawei dispatched dozens of trucks to Weichuanlis Zhuhai factory on the evening of May 17 to ship Huaweis materials and equipment with more than 400 million yuan, Weichuanlis Zhuhai factory suddenly received instructions from its executives that it was related to U.S. export controls. According to laws and regulations, Flextronics cannot release Huaweis property-owned equipment and materials. This action also shocked all the Huawei people present on the spot.

As a result, Huaweis truck fleet, which was lined up that night, could only return empty-handed.

People familiar with the matter said that Huawei was shocked and dismayed by the incident. After all, after being blacklisted by the United States, Huaweis other generations of factories did not appear in this situation. At the same time, Huawei is still an acquaintance who has worked with Huawei for many years, and its attitude of turning a face faster than turning a book is really hard for Huawei to understand.

Of course, the most irritating thing is that Flextronics has detained Huaweis materials and equipment on the pretext of American law in Chinese territory. According to people familiar with the matter, Huaweis managers believe that Flextronics overinterprets American law and is not only suspected of violating Chinese law, but also violating Chinas judicial sovereignty.

_The screenshot is the official website of Flextronics.

They, in Chinese territory,

Continuous use of U.S. government laws and regulations to challenge Huawei

However, Huawei did not publicize the matter at that time, but wanted to negotiate with Flextronics as soon as possible to solve the problem, so as not to be delayed by the matter to the customers order delivery, causing losses to customers and themselves.

According to people familiar with the matter, during more than 10 rounds of negotiations between the two sides, Flextronics has repeatedly over-interpreted American laws, made difficulties with Huawei, and continued to refuse to return Huaweis materials, which have been detained by factories in Zhuhai, China for more than 400 million yuan. There have even been many times a negotiated solution between the two sides, Flextronics. But the situation of changing hexagrams will change.

The person familiar with the matter disclosed that Huawei Company, which had intolerable attitude toward Flextronics, sent a strongly worded lawyer letter to Flextronics, pointing out that Flextronicsbehavior was serious and beyond the scope of normal contract disputes, and demanded that Flextronics should return all its possessions to Huawei. The right of material and equipment, otherwise will require Flextronics to bear all losses.

Flextronics later responded to Huaweis lawyer letter. According to people familiar with the matter, Flextronics has publicly declared in this lawyers letter that it has a legal obligation to review Huaweis proprietary materials and equipment under US export control laws. This has become a gesture of playing the law enforcement role of the U.S. government on Chinese territory. Flextronics also refused to compensate Huawei for force majeure.

Huawei subsequently sent two letters to Weichuang to reiterate that Huawei owns the legal ownership of the materials and equipment Huawei provided to Weichuang under Chinese law, and Huawei has the right to dispose of the materials and equipment it owns.

In such a difficult situation as Flextronics, Huaweis 700 million materials and equipment have been detained for more than a month, resulting in huge losses for Huawei, and even had to pay extra money to re-purchase equipment and materials to customers.

It was not until mid-June that Flextronics finally agreed to return Huaweis materials and equipment one after another, but on the condition that they were transferred to a third party not included in the U.S. Entity List of Huawei and its 68 affiliates, and that Huawei had to pay its own expenses.

Experts say Viaco has been suspected of breaking the law.

Chinas unreliable entity has one more candidate?

Finally, according to people familiar with the matter, Huawei believes that Weichuanli not only overinterpreted the relevant laws, regulations and policies of the U.S. entity list, but also suspected of violating Chinese laws: Weichuanli and Huawei signed contracts in China mainly in Zhuhai, China, registered as Weichuanli Manufacturing (Zhuhai) Co., Ltd. Therefore, the factory in Zhuhai should abide by Chinese law, and should not seize Huaweis material privately under American law as a shield.

But up to now, Huawei has not responded to the insidersdisclosure of the dispute with Flextronics. Flextronics has not yet responded to Geng Zhiges e-mail through his official website.

In an interview with Geng Zhige, Huo Zhengxin, professor of international law at China University of Political Science and Law, said that although there is no need to evaluate whether Flextronics acts in violation of international law or laws of other countries, it is registered in Zhuhai, China. The wholly-owned subsidiary company Weichuangli Manufacturing (Zhuhai) Co., Ltd and the factory, whose nationality is China, are located in China and need to abide by the territorial jurisdiction of China and can not be overstepped.

Professor Huo pointed out that the U.S. government can require U.S. enterprises to abide by U.S. laws, but in China, U.S. domestic administrative laws and regulations are ineffective, that is, public law has no extraterritorial effect. Therefore, Professor Huo believes that if Huawei was contracted by the company in Zhuhai, it would at least violate the territorial jurisdiction of Chinese law to seize Huaweis material under the domestic law of the United States, and there is a problem of breach of contract.

In the interview, Professor Huo also mentioned the list of unreliable entities that the Ministry of Commerce of China is preparing to launch. He said that those enterprises in China who ignore Chinas territorial jurisdiction and enforce U.S. domestic laws are also currently studying the subject of sanctions.

_Photo Source: Oriental IC

Finally, it is worth mentioning that Huawei has had similar disputes with FedEx in the United States before, and many of its packages have been unauthorized transported to the United States by the American Express Company for review.

But after being strongly questioned by public opinion, FedEx quickly launched a criticism against the U.S. Department of Commerce, saying that its sanctions against Huawei were too vague and broad, forcing FedEx, an ordinary express company, to act as the law enforcement agency of the U.S. Department of Commerce. FedEx also sued the U.S. Department of Commerce.

The U.S. Department of Commerce said FedEx overinterpreted its laws and regulations.

The Wall Street Journal reports that FedEx sued the U.S. Department of Commerce

Source: Global Times Responsible Editor: Qiao Junjing_NBJ11279