US charges Huawei with technology theft, sanctions violations

WASHINGTON,

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.

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.

MENG'S ARREST
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.

Acting US Attorney General Matthew Whitaker said the extradition request would be sent by a January 30 deadline.

A hearing is set for February 6 in Canada.

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."

SANCTIONS VIOLATIONS

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.

TAPPY

The second case charged that Huawei made a concerted action 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 amid tense trade negotiations between the United States and China.

Speaking together with Justice Department officials announcing the indictments, 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."​