US files criminal charges against Huawei

The United States has filed criminal charges against Huawei, escalating its fight against the Chinese tech giant and potentially complicating efforts by Washington and Beijing to negotiate an end to their bruising trade war.

The Justice Department on Monday unsealed two cases against Huawei that detail a slew of allegations. One indictment accuses Huawei of trying to steal trade secrets from T-Mobile, and of promising bonuses to employees who collected confidential information on competitors. A second indictment claims the company worked to skirt US sanctions on Iran.

The agency also revealed formal charges against Meng Wanzhou, Huawei’s chief financial officer. Meng was arrested in Canada in December, and the United States is looking to extradite her.

“Today we are announcing that we are bringing criminal charges against telecommunications giant Huawei and its associates for nearly two dozen alleged crimes,” Acting Attorney General Matthew Whitaker said in a statement. “China must hold its citizens and Chinese companies accountable for complying with the law.”

FBI Director Christopher Wray said at a press conference that Huawei “relied on dishonest business practices that contradict the economic principles that have allowed American companies and the United States to thrive.”

Huawei said on Tuesday it was “disappointed” by the US move to bring charges against it.

“The company denies that it or its subsidiary or affiliate have committed any of the asserted violations of US law set forth in each of the indictments, is not aware of any wrongdoing by Ms. Meng, and believes the US courts will ultimately reach the same conclusion,” it said in a statement.

The Chinese government reacted angrily to the charges, accusing the United States of using “its state power to smear and crack down on targeted Chinese companies in an attempt to kill their normal and legal business operations.”

“We strongly urge the United States to stop its unreasonable crackdown on Chinese companies, including Huawei,” Foreign Ministry spokesman Geng Shuang said in a statement. He added that the United States should “immediately withdraw its arrest warrant on Ms. Meng and refrain from making a formal extradition request to avoid walking farther down a wrong path.”

The charges

A 10-count indictment, which was filed in Washington state, claims that Huawei worked for years to steal T-Mobile’s proprietary phone testing technology, known as “Tappy.” Huawei supplied phones to T-Mobile, and had access to some information about Tappy because of that relationship.

Huawei was also building its own phone-testing robot in China. Federal prosecutors claim the company repeatedly directed its own employees to gather details about how Tappy worked — a violation of the confidentiality and non-disclosure agreements it had with T-Mobile.

The government also unsealed a 13-count indictment against Huawei and Meng in Brooklyn federal court. That document details an alleged scheme by Huawei to deceive financial institutions and the US government about its business in Iran.

According to the indictment, the deception goes back to mid-2007, when Huawei’s founder, Ren Zhengfei, falsely told the FBI that the company did not violate any US export laws, and that it had not dealt directly with any Iranian company.

The company and Meng are also said to have claimed that an affiliate, Skycom, was a separate company in order to conduct business in the country, when in fact it was a subsidiary.

Meng has denied any wrongdoing. Huawei said on Tuesday that it had attempted to discuss the case with the US Justice Department after her arrest in December but that “the request was rejected without explanation.”

Huawei is under fire in other parts of the world, too.

Earlier this month, a Huawei executive was arrested in Poland on charges of spying for China. The company has since fired the employee. And Germany and other European countries are reportedly considering barring Huawei equipment from the country’s 5G networks. The company is already banned from supplying 5G equipment to Australia and New Zealand.

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