Abu Dhabi, UAEMonday 20 May 2019

US charges Chinese tech giant Huawei and top executive

Company is also charged with stealing trade secrets from T-Mobile, according to federal prosecutors

Acting attorney general Matthew Whitaker announces law enforcement action related to Huawei. EPA
Acting attorney general Matthew Whitaker announces law enforcement action related to Huawei. EPA

The US Justice Department unsealed criminal charges on Monday against Chinese tech giant Huawei, two of its subsidiaries and a top executive, who are accused of misleading banks about the company’s business and violating US sanctions.

According to prosecutors, the company is also charged in a separate case with stealing trade secrets from T-Mobile, the merged identity of America's Sprint with the German telecom company.

Prosecutors are seeking to extradite the company’s chief financial officer, Meng Wanzhou, and allege she committed fraud by misleading banks about Huawei’s business dealings in Iran. She was arrested on December 1 in Canada.

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The criminal charges in Brooklyn and Seattle come ahead of trade talks between China and the US this week.

“As I told high-level Chinese law enforcement officials in August: we need more law enforcement co-operation with China,” acting attorney general Matt Whitaker said at a news conference with other cabinet officials, including commerce secretary Wilbur Ross and homeland security secretary Kirstjen Nielsen. “China should be concerned about criminal activities by Chinese companies and China should take action.”

US prosecutors charge that Huawei used a Hong Kong shell company to sell equipment in Iran in violation of US sanctions. Huawei had done business through a company called Skycom and Meng allegedly misled US banks into believing the two companies were separate, according to the Justice Department.

Monday's announcement includes a 10-count grand jury indictment in Seattle, and a separate 13-count case from prosecutors in the Eastern District of New York.

“As you can tell from the number and magnitude of the charges, Huawei and its senior executives repeatedly refused to respect US law and standard international business practices,” said FBI director Chris Wray.

A Huawei spokesman did not immediately return phone messages seeking comment.

Huawei is the world’s biggest supplier of network gear used by phone and internet companies and has long been seen as a front for spying by the Chinese military or security services.

Prosecutors also allege that Huawei stole trade secrets, including technology behind a robotic device that T-Mobile used to test smartphones, prosecutors said. A jury in Seattle ruled that Huawei had misappropriated the technology from T-Mobile’s lab in Washington state.

The Huawei case has set off a diplomatic spat with the three nations, which has threatened to complicate ties between the US and Canada. President Donald Trump said he would get involved in the Huawei case if it would help produce a trade agreement with China and told Reuters in an interview in December that he would “intervene if I thought it was necessary.”

The arrest of Meng, the daughter of Huawei’s founder, at Vancouver’s airport has triggered a fallout in relations between Canada and China. China detained two Canadians shortly after Meng’s arrest. A Chinese court also sentenced a third Canadian to death in a sudden retrial of a drug case, overturning a 15-year prison term handed down earlier.

David Martin, Meng’s lawyer in Canada, did not immediately respond to a message seeking comment. Meng is out on bail in Vancouver and is due to back in court on February 6 as she awaits extradition proceedings to begin.

Canada arrested Meng at the request of the United States. The Chinese have been furious at Canada since and arrested Canadian former diplomat Michael Kovrig and businessman Michael Spavor on December 10 on vague allegations of endangering national security.

Canada Prime Minister Justin Trudeau fired his ambassador to China, John McCallum, after the envoy said it would be “great” if the US dropped its extradition request for a Chinese tech executive arrested in Canada.

Updated: January 29, 2019 10:30 AM

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