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US charges China’s Huawei with sweeping criminal charges

A Huawei location in Santa Clara, Calif., on April 19, 2018. (Yichuan Cao/Sipa USA/TNS)
January 28, 2019

Tensions between the U.S. and China could escalate once again after the Department of Justice announced 13 charges against Chinese technology giant Huawei on Monday.

DOJ officials announced the 13 charges during a press briefing on Monday afternoon, during which they said Huawei, its two affiliate companies, and chief financial officer Meng Wanzhou have been named in the indictment, according to a DOJ press release.

Huawei’s American subsidiary, Huawei Device USA, and Iranian affiliate Skycom Tech were among the two affiliated companies in the indictment.

The charges allege that Huawei and Skycom conspired to commit bank fraud and wire fraud, and successfully committed that fraud due to false information provided to the U.S. government.

“The criminal activity alleged in this indictment goes back at least 10 years and goes all the way to the top of the company,” acting Attorney General Matthew Whitaker told the media.

“As early as 2007, Huawei employees allegedly began to misrepresent the company’s relationship with its Iranian affiliate,” Whitaker said. “Huawei allegedly told banking partners that Huawei had sold banking interest in Skycom, but these claims were false. In reality, Huawei had sold Skycom to itself.”

Huawei claimed Skycom was a separate company out of their control and insisted it was in compliance with U.S. sanctions on Iran.

As a result, banks business with Skycom, helping them transfer hundreds of millions of dollars through U.S. institutions while unknowingly violating U.S. sanctions on Iran.

The DOJ also revealed 10 additional charges against Huawei for its theft of trade secrets, including the theft of a mobile phone testing robot from T-Mobile, according to a DOJ release.

“These charges lay bare Huawei’s blatant disregard for the laws of our country and standard global business practices,” stated FBI Director Christopher Wray.  “Companies like Huawei pose a dual threat to both our economic and national security, and the magnitude of these charges make clear just how seriously the FBI takes this threat. Today should serve as a warning that we will not tolerate businesses that violate our laws, obstruct justice, or jeopardize national and economic well-being.”

In December, the DOJ indicted Meng, Huawei’s CFO and daughter of the company’s founder Ren Zhengfei, alleging she violated sanctions against Iran. Meng was arrested by Canadian authorities and was slated to be extradited to the U.S.

With the latest indictment, the U.S. may officially file the paperwork to have Meng extradited from Canada.

Huawei has long been suspected of facilitating surveillance or communication disruptions on behalf of the Chinese government. Huawei smartphones were banned from U.S. military bases this year over concerns of security threats.

Further, the DOJ has been probing Huawei’s dealings with Iran since April, and the company had been suspected of violating sanctions imposed on Iran for numerous years.

“For years, Chinese firms have broken our export laws and undermined sanctions, often using the U.S. financial systems to facilitate their illegal activities,” stated U.S. Department of Commerce Secretary Wilbur Ross. “This will end.”