United States charges Huawei with stealing trade secrets, fraud

Sheri Evans
January 31, 2019

The statement said China would "determinedly" defend the "legitimate" rights and interests of Chinese companies overseas.

The charges were announced just before a crucial two-day round of trade talks between the USA and China were scheduled to begin in Washington. Trade analysts say they could dim prospects for a breakthrough.

The other indictment was filed by the federal prosecutors from the Western District of Washington state in Seattle, which accused Huawei of stealing trade secrets from telecom carrier T-Mobile.

Meng, the arrested daughter of the company's founder, is faced with charges of bank fraud, wire fraud and conspiracy to commit bank and wire fraud.

The charges come at a time of increasing global scrutiny and cyberintelligence concerns over Huawei due to allegations that its products could be used by the Chinese communist regime for spying-an allegation the company denies. Huawei has effectively been frozen out of the United States market, although it does provide equipment to a number of smaller players in the country, while Australia has banned its operators from using Huawei equipment in their 5G rollouts on national security grounds.

The DOJ alleges that, since 2007, Chinese telecom giant Huawei misled global banks and US authorities about the company's relationship with Hong Kong-based Skycom Tech, which prosecutors allege conducted business in Iran on behalf of Huawei. "China should be concerned about criminal activities by Chinese companies, and China should take action".

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"Huawei and Huawei USA are charged with conspiracy to obstruct justice related to the grand jury investigation in the Eastern District of NY".

"The alleged conduct described in the indictment occurred from 2012 to 2014, and includes an internal Huawei announcement that the company was offering bonuses to employees who succeeded in stealing confidential information from other companies", the agency writes in its release. A jury has already awarded T-Mobile $4.8 million.

In a separate case, the US department has also charged Huawei with stealing trade secrets from T-Mobile USA Inc.

Macau is an autonomous Chinese territory and maintains a legal system separate from that of mainland China. "This issue is part and parcel of that tech war between the two countries", said Associate Professor Li Mingjiang, coordinator of the China programme at the S. Rajaratnam School of International Studies. Mark Warner called the company a "national security threat," believing the company to be acting as a backdoor for the Chinese government. "Huawei is a global bad actor operating at the behest of the Chinese government and intelligence services".

Meng, the 46-year-old daughter of Huawei's billionaire founder, was detained on a provisional arrest warrant at the Vancouver airport December 1 before she could board a flight to Mexico after arriving from Hong Kong. She was arrested last month by Canadian authorities at the request of the United States.

January 14: A Chinese court sentences Canadian Robert Lloyd Schellenberg to death in a drug smuggling case, overturning his 15-year sentence from November.

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