US charges Huawei with tech theft, sanctions busting

The US Justice Department on Monday unveiled sweeping charges
against Chinese telecommunications giant Huawei in two cases likely
to ratchet up tensions between the two superpowers — including that
of a top executive arrested in Canada on a US warrant.

The department unveiled 13 charges against Huawei Technologies,
its chief financial officer Meng Wanzhou — the daughter of the
company’s founder who is currently out on bail in Canada — and two
affiliates related to violating US sanctions on Iran.

Meng’s case has sparked a major crisis between Beijing and
Ottawa, which is accused of doing Washington’s bidding.

The indictment was unsealed as China’s top trade negotiator
arrived in Washington for high-stakes talks with US officials,
possibly complicating the discussions ahead of a March deadline to
avert a deepening of their trade war.

In addition, 10 US federal charges were filed against two Huawei
affiliates for stealing robot technology from T-Mobile.

“Both sets of charges expose Huawei’s brazen and persistent
actions to exploit American companies and financial institutions,
and to threaten the free and fair global marketplace,” said FBI
Director Christopher Wray.

China reacted furiously, saying there were “strong political
manipulations” behind the case against Huawei.

In a statement sent to AFP, Huawei denied “that it or its
subsidiary or affiliate have committed any of the asserted
violations of US law set forth in each of the indictments.”

The firm “is not aware of any wrongdoing by Ms Meng (Wanzhou),
and believes the US courts will ultimately reach the same
conclusion,” it added.

Meng — who was arrested in Vancouver on December 1 at
Washington’s request — is expected to fight extradition to the
United States, amid heavy pressure on Canada from Beijing, whose
subsequent detention of two Canadians is seen as an act of
retaliation for Meng’s arrest.

Late Monday, Canada’s Justice Department confirmed that
officials had received a formal extradition request from the US,
reported Canadian broadcaster CBC, with a hearing set for February
6.

Acting US Attorney General Matthew Whitaker said there was
nothing in the indictment that alleged Chinese government
involvement in either case.

However, he added, “As I told Chinese officials in August, China
must hold its citizens and Chinese companies accountable for
complying with the law.”

The Chinese foreign ministry accused Washington of using “state
power to discredit and crack down on specific Chinese companies in
an attempt to strangle the enterprises’ legitimate and legal
operations”.

“There are strong political motivations and political
manipulations behind the actions,” ministry spokesman Geng Shuang
said in a statement, urging Washington to stop “the unreasonable
suppression of Chinese companies including Huawei.”

The broader allegations against Meng, filed in federal court in
New York, had already been revealed in general terms by Canadian
authorities.

They allege that between 2007 and 2017, Meng, Huawei and the
subsidiaries sought to mask their business with Iran in violation
of US and UN sanctions on the country.

Meng in particular “repeatedly lied” to bankers about the
relationships between the companies, especially with Skycom, a
Huawei affiliate in Iran, according to the charges.

That violated US laws, the Justice Department said, because the
Iran business involved US-dollar transactions processed by banks
through the United States.

Huawei and the affiliates also lied to US authorities,
obstructing the investigation, they said.

Beijing renewed its demand for the US to drop its warrant
against Meng and for Canada to release her.

The second case charged that Huawei made a concerted effort to
steal technology related to a phone-testing robot dubbed Tappy from
a T-Mobile USA lab in Washington state.

Engineers of Huawei — which was supplying T-Mobile with phones —
took pictures and made measurements of parts of the robot, “even
stealing a piece of it,” said Whitaker.

The Justice Department charged that the Chinese company had, in
July 2013, offered bonuses to employees “based on the value of
information they stole from other companies around the world, and
provided to Huawei via an encrypted email address.”

The indictments came as Chinese Vice Premier Liu He arrived in
Washington on Monday to lead trade talks this week, according to
Chinese state media.

Speaking together with Justice Department officials announcing
the indictments, US Secretary of Commerce Wilbur Ross said they
were “wholly separate from our trade negotiations with China.”

However, he added: “Commerce will continue to work with our
interagency partners to protect US national security
interests.”