annual_report_2019_en

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2019 Annual Report (^143)
Legal risks: Operational compliance provides a solid
foundation on which Huawei can survive, and continue
serving and contributing to the world. Huawei has
always been dedicated to strictly complying with
all applicable laws and regulations of the countries
and regions in which it operates. These include all
applicable laws and regulations of the UN, US, and
EU.
Through sustained investment, we have established
a compliance management system that applies to all
our businesses and employees worldwide and covers
all legal obligations including but not limited to trade
compliance, financial compliance, anti-bribery, trade
secret protection, cyber security and privacy, and
anti-unfair competition. This enables the systematic
management of compliance risks through established
policies, organizations, regulations, processes, etc.
Despite these efforts, we may still experience negative
impacts due to the complex legal environments of some
of the countries and regions in which we operate. For
example, a lack of clarity or transparency in regards to
local laws or ambiguity surrounding the legal system or
law enforcement. Huawei will continue, as always, to
learn from industry best practices and take preventative
measures to address risks. The certainty of legal
compliance is our best bulwark against the uncertainty
of the external environment.
Trade risks: Trade barriers have been a persistent
challenge for both importers and exporters.
Deglobalization and protectionism, the two prominent
risks within global trade, coupled with increasing trade
restrictions, are further fueling global trade tensions.
At the same time, while new technologies are driving
changes in our economy, trade models, and daily
lives, they are also rendering some existing trade rules
obsolete. Following numerous setbacks, the world
trading system has been weakened, calling for a revisit
of existing trade rules.
In addition, mega free trade agreements are being
negotiated and implemented across the globe.
Some major economies are reassessing their trading
relationships. All of these developments are creating
greater policy uncertainty. On December 11, 2019,
the Appellate Body of the World Trade Organization
(WTO) was deemed dysfunctional for various reasons,
serving as a direct example of the huge challenges
facing international trade. As a global company,
Huawei opposes protectionism, supports global trade
rules, and places trade compliance above its own
commercial interests.
Natural disasters: It is our mission and primary social
responsibility to maintain stable network operations.
Earthquakes, floods, epidemics, and other natural
disasters can impact Huawei’s business operations
in many different ways and thus can impact the
operations of the networks we have deployed. We have
robust mechanisms for responding to natural disasters
and continue to improve our capabilities in this regard.
This has helped us to ensure business continuity and
effectively support our customers’ network stability.
Country-specific risks: Huawei currently operates
in more than 170 countries and regions worldwide.
Therefore, the complex international economic and
political landscape could expose Huawei to particular
risks in certain countries and regions. These risks
include economic and political instability, exchange
rate fluctuations, and sovereign debt risks. Bilateral
or multilateral tensions between certain countries
or regions caused by special circumstances could
hinder Huawei’s local business operations and bring
uncertainty to our local business development. To
address these issues, Huawei requires exceptional
risk management and response capabilities. We
will closely monitor any potential risks or changes
in the environment, and promptly employ effective
countermeasures to help achieve business objectives.

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