US Justice Draws 23 Charges Against Huawei Business and Financial Manager
Huawei and its chief financial officer currently on probation in Canada are charged with stealing trade secrets, bank fraud and violation of the trade embargo imposed on Iran.
The US Department of Justice has released the charges against Huawei and its financial director Meng Wanzhou. Ten counts allege that the Chinese giant stole trade secrets from T-Mobile in 2012. Huawei also allegedly offered bonuses to employees who stole confidential information from other companies, including T-Mobile.
The second indictment of 13 counts was brought against four defendants, including Huawei and Meng Wanzhou, for financial fraud. The subsidiaries Huawei USA and Skycom are also mentioned in the procedure.
“At the expense of American ingenuity, Huawei has continuously ignored US laws in the hope of gaining an unfair economic advantage. As evidenced by the volume of these charges, the FBI will not tolerate corrupt companies that violate the laws that allow American businesses and the United States to prosper,” said Christopher Wray, director of the FBI.
International pressure rises against Huawei
The charges against Huawei, the world’s largest provider of telecommunications equipment and the second-largest smartphone vendor behind Samsung, come amidst increased surveillance. The United States has already banned the company from selling telecom equipment on its territory, and a number of other countries have already stopped working with the company or plan to ban it.
The Chinese government and Huawei said the measures could have repercussions since the company is contributing to industry technology standards like 5G.
“The U.S. government and China have an extremely complex, multifaceted relationship. Our client, Sabrina Meng, should not be a pawn or a hostage in this relationship,” Huawei attorney Reid Weingarten said in a statement. “Ms. Meng is an ethical and honorable businesswoman who has never spent a second of her life plotting to violate any U.S. law, including the Iranian sanctions.”
According to the first round of charges, Huawei started stealing information on a T-Mobile phone test robot called Tappy. Huawei’s engineers allegedly breached confidentially and non-disclosure agreements by taking photos and measurements of Tappy and stealing parts. When T-Mobile found out and threatened to sue, Huawei claimed that dishonest people committed the robbery within the company.
T-Mobile still filed a lawsuit and in 2017 was awarded $4.8 million in damages. Despite Huawei’s insistence that it was a one-time affair, the Department of Justice claims that the emails obtained during the investigation has more serious allegations.
In the second set of charges, Meng Wanzhou was charged with bank fraud, electronic fraud and conspiracy to commit bank and electronic fraud. Huawei and Huawei USA are accused of conspiracy to obstruct justice. Huawei and Skycom are charged with bank fraud and conspiracy to commit bank fraud, electronic fraud and conspiracy to commit electronic fraud, violation of the International Emergency Economic Powers Act (IEEPA), conspiracy to violate the IEEPA and conspiracy to commit money laundering.
China, however, strongly objected the allegations and denied any wrongdoing by the Chinese company.
“For some time, the U.S. has used its government power to discredit and crack down on specific Chinese companies in an attempt to stifle their legitimate operations,” Foreign Ministry spokesman Geng Shuang said in a statement in Beijing. “We strongly urge the U.S. to stop the unreasonable suppression of Chinese companies, including Huawei, and treat Chinese companies objectively and fairly.”
Meng Wanzhou could be extradited to the United States
The charges are related to the company’s alleged efforts to evade US sanctions and trade with Iran. Last month, Meng Wanzhou was detained in Canada at the request of the United States over these allegations. The release of the indictment opens a 30-day window during which Canada will have to consider the United States’ request for extradition of the Huawei leader. If accepted, the British Columbia Supreme Court will have the task of ruling on this decision.
Wanzhou happens to be the daughter of the founder and president of Huawei, Zhengfei Ren. The arrest not only has repercussions in the industry, but it also threatens to ignite an already precarious relationship between the United States and China over trade negotiations. Huawei has always denied any wrongdoing on the part of its chief financial officer.
In recent months, the Chinese industrialist has faced a wave of negative sentiment. In the United States, Japan, New Zealand, Australia, but also in Europe, the United Kingdom, and Germany, governments have or will enact boycotts on Huawei telecom equipment for deployment of future 5G networks.