U.S. federal prosecutors are reportedly pursuing a criminal case against Chinese tech giant Huawei for allegedly stealing trade secrets from American companies, including T-Mobile.
The Wall Street Journal first broke the news on Wednesday, but it has yet to be confirmed by the Justice Department.
No charges have been filed yet and the investigation has not been formally announced, but officials familiar with the probe told the Wall Street Journal that an indictment could come soon.
#BREAKING: Federal prosecutors launch criminal investigation into Chinese telecom giant Huawei: report https://t.co/acBLHhuokr pic.twitter.com/lF4vjTrXUp
— The Hill (@thehill) January 16, 2019
The case, if confirmed, comes during a time of tense trade talks between the U.S. and China.
Canada is also catching pressure from China, after China on Monday sentenced a Canadian man to death after he was accused of drug smuggling.
The harsh sentence comes amid international tensions between China and Canada, this after Canada last month arrested Meng Wanzhou, Huawei’s chief financial officer and daughter of the company’s founder, Ren Zhengfei, on charges of violating sanctions on Iran. The arrest was executed at the request of the U.S.
Following the arrest of Wanzhou, China has detained 13 Canadian nationals.
Wanzhou’s arrest left speculation that it could further sour tensions between the U.S. and China, currently in the midst of tense trade talks, as Huawei is highly regarded in China. It is the second leading smartphone company in the world, and is the largest producer of cellular and internet networking equipment.
Last week, Poland confirmed it arrested another executive from Huawei, and a Polish national, on charges of spying for China.
Huawei’s sales director, identified by the Chinese Embassy in Poland as Weijing Wang, and an unnamed Polish national face up to 10 years in prison it they are convicted, CNN had reported Friday, adding that both pleaded not guilty, according to Polish state TV.
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 Justice Department has been probing Huawei’s dealings with Iran since April, and the company is suspected of violating sanctions imposed on Iran for more than two years.
Huawei’s competitor, ZTE, was also found to be violating sanctions on Iran.
Consequently, ZTE components were banned from the U.S., which devastated the company and nearly caused it to dissolve into bankruptcy. Earlier last year, ZTE paid some $1.4 billion in fines to the U.S. and agreed to a management restructure in order to lift the ban in the U.S.
Huawei is preparing to roll out new 5G wireless technology, allowing greater connectivity to the internet through devices such as health monitors and autonomous vehicles, prompting greater concern over Huawei’s ability to access sensitive information.
The U.K., Australia, and New Zealand have pre-emptively banned Huawei on 5G networks.
In December, it was reported that President Donald Trump could be eying an executive order that would prohibit American companies from using restricted telecommunications equipment, possibly from Huawei and ZTE.
