Telecom giant Huawei announced on 5 December it has launched an authorized challenge to last month’s decision by US regulators to classify it as a national security threat.

The legal challenge is a response to the US Federal Communications Commission that set restraints on rural mobile providers from using $8.5 billion government fund to buy Huawei tools. Huawei warned that the FCC’s ruling would hurt rural American carriers, and said it had filed a petition with a New Orleans court in a bid to overturn the decision.

Huawei is a key manufacturer of technology for 5G telecoms infrastructure. This is its second legal challenge this year, after it challenged a decision in May to block US government departments from buying its equipment.

“The designation is based on a fundamental misunderstanding of Chinese law and on unsound, unreliable, and inadmissible accusations and innuendo, not evidence”, said Huawei’s lead counsel for the legal action.

Huawei has denied all accusations that it is a security risk, saying it is a private company with no ties to the communist regime.