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Operational Compliance

Adherence to business ethics, international conventions, and laws and regulations is key to Huawei's operational compliance worldwide. This also reflects our unwavering commitment to business integrity. To ensure operational compliance, we advocate fair competition, trade compliance, and protection of intellectual property, and oppose bribery and corruption. We proactively embrace best practices and embed compliance requirements into our corporate policies, regulations, and processes. Professional teams are in place to manage our compliance.

Improving Compliance Management

Operational compliance is always high on our agenda. We have incorporated compliance requirements into our routine operations. In key domains such as trade compliance and cyber security, we have established an operational compliance management system that meets industry standards and has been scrutinized by third-party auditors.

To ensure compliance, we hold frequent dialogues with government agencies and undergo their audits. Our active efforts have earned us recognition from government stakeholders.

We maintain routine communication with all stakeholders, aiming to spur transparency, mutual understanding, and trust on an ongoing basis. Together with our stakeholders, we aim to create a healthy business environment and define full compliance as a baseline.

In partnership with external consultants, our Legal Affairs Department provides legal guidance on building a global compliance system, trade compliance, IPR protection, anti-bribery and anti-corruption, and HR management. The department also conducts issue identification and evaluation, specifies compliance requirements, and releases warnings about internal and external legal risks. This helps other departments ensure legal compliance throughout their operations.

Fostering a Culture of Compliance

A robust compliance system cannot work without a culture of compliance that pervades the entire organization. Huawei continuously fosters a culture of compliance – both internally and externally – to ensure it can reinforce our compliance system.

Huawei Rotating CEO Mr. Guo Ping re-affirmed our commitment to compliance at a meeting with an external compliance consultant group in 2016. Mr. Guo also explained how our executives have always valued and supported the company's progress on compliance. In 2016, Huawei shared its compliance concepts and achievements during several meetings with government agencies and partners. Moving forward, we will continue to implement the individual accountability mechanism to discipline acts of non-compliance, thus gaining more benefits from our robust culture of compliance.

Building a Global Operational Compliance System

In 2016, we went to great lengths to build an operational compliance system in our subsidiaries outside China. In terms of organization, we appointed and trained compliance officers for 97 countries and regions. In terms of business development, we engaged with world-class consultants as part of our wider effort to ensure compliance. For example, we ran a pilot project in our German subsidiary, using Germany's IDW PS 980 standards to comprehensively evaluate the maturity of the unit's compliance management system. Our subsidiaries delivered on their compliance goals and fostered their expertise in compliance. We achieved this by bringing industry-leading compliance management concepts and methodologies into Huawei, and by adopting viable measures against compliance risks. In addition, we established supervisory organizations in subsidiaries to systematically oversee operational compliance and align the objectives of compliance management with corporate compliance strategy. All these efforts helped our subsidiaries operate in compliance with local laws and regulations.

Protecting Intellectual Property Rights

Huawei respects the intellectual property rights (IPR) of others, complies with international IPR laws, and resolves IPR issues through negotiation, cross-licensing, and product cooperation – in an open, positive, and friendly manner. We also employ legal means to protect ourselves against malicious infringements on our IPR.

Huawei is one of the world's largest patent holders and investors in R&D, so protecting IPR is in our best interest.

As of December 31, 2016, Huawei had filed 57,632 patent applications in China and 39,613 outside China, with a total of 62,519 patents granted.

As of December 31, 2016, Huawei is a member of over 360 standards organizations, industry alliances, and open source communities, and holds more than 300 positions of responsibility within these organizations. Huawei is a board member of IEEE-SA, BBF, ETSI, TM Forum, WFA, WWRF, OpenStack, Linaro, OPNFV, and CCSA. In 2016, we submitted more than 6,000 proposals to standards organizations (over 49,000 to date).

In 2016, we ranked second in terms of invention patents in China, 7th in Europe, and 25th in the US.

Anti-bribery and Anti-corruption

Integrity is at the core of our operations, and we have zero tolerance for bribery or corruption. We have launched various activities to increase employee awareness of business ethics and legal compliance. For example, all employees are required to understand and sign our Business Conduct Guidelines (BCGs) and pass an online test on the subject every year to increase their awareness of anti-bribery and anti-corruption efforts. To increase our positive influence on suppliers, we include strong ethical provisions in all contracts with suppliers, and require them to understand and sign the Honesty and Integrity Agreement. In addition, we have established complaint channels through which employees and other parties can report unethical and illegal behavior.

Full Implementation of Anti-bribery and Anti-corruption Measures

Huawei adheres to all applicable laws and regulations of the countries and regions in which we operate, as well as relevant international conventions. We have anti-bribery and anti-corruption processes and systems, and implement a series of measures to achieve tangible prevention of bribery and corruption.

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