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Chinese officials suspect FedEx held back over 100 Huawei packages

Posted at 1:00 AM, Jul 26, 2019
and last updated 2019-07-26 08:12:10-04

Chinese authorities suspect FedEx of holding back more than 100 packages that tech company Huawei was trying to deliver to China, state media reported Friday.

Regulators in China concluded that FedEx committed “violations” when it diverted Huawei parcels, according to state news agency Xinhua.

The Chinese government opened an investigation nearly two months ago after Huawei said FedEx diverted to the United States packages intended for the company’s offices in China.

Two packages were supposed to be delivered from Japan to China, but were sent to the United States instead. Huawei has said that FedEx attempted to divert another two packages that it intended to be shipped from Vietnam to other Huawei offices in Asia. Huawei said the packages contained documents.

FedEx apologized at the time and said the packages were misrouted. CNN Business has reached out to the company for comment about the latest Xinhua report.

US-China trade relations remain tense, and Huawei has been a particular bone of contention. The US government has said the company poses a national security risk, a claim Huawei denies. The Trump administration in May added the Chinese tech firm to a list of companies it says undermine US interests — a decision that forced crucial suppliers to cut ties with Huawei.

Huawei declined to comment Friday on the results of the Chinese probe. When details about the initial diverted packages first emerged, Huawei welcomed FedEx’s apology but said it suspected that the diversion was intentional.

Chinese authorities said Friday that “the relevant regulatory department found out that FedEx’s statement that the mistaken transfer of Huawei’s parcels was ‘operational error’ was inconsistent with the facts,” according to the statement published by Xinhua.

When China launched its initial investigation in June, the government said at the time that the incident involving FedEx “seriously harmed the legitimate rights and interests of its client, and violated Chinese laws and regulations on the express delivery sector.”

Authorities said Friday that the government’s investigation will continue.

President Donald Trump said on the sidelines of the G20 summit last month that he would ease some restrictions on Huawei. But there have been complications since then, including a Washington Post report this week that claimed Huawei may have violated US sanctions on North Korea by helping it set up a cellular network.

Huawei told CNN Business earlier this week that it has “no business presence” in North Korea. A spokeswoman declined further comment.