US charges Huawei in technology theft, sanctions violations

FBI Director Christopher Wray (2nd R) speaks alongside Acting US Attorney General Matthew Whitaker (2nd L), Secretary of Homeland Security Kirstjen Nielsen (R), and Commerce Secretary Wilbur Ross (L) as they announce a 13-count indictment of financial fraud charges against Chinese telecommunications manufacturer Huawei, as well as two affiliated companies and Huawei’s Chief Financial Officer Meng Wanzhou, during a press conference at the Department of Justice in Washington, DC, January 28, 2019. (Photo by SAUL LOEB / AFP)

WASHINGTON, United States (AFP) — 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.

Extradition request

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.”

WASHINGTON, DC – JANUARY 28: (L-R) U.S. Commerce Secretary Wilbur Ross, acting Attorney General Matthew Whitaker, Homeland Security Secretary Kirstjen Nielsen, Federal Bureau of Investigation Director Christopher Wray and U.S. Attorney Richard Donoghue of the Eastern District of New York announce new criminal charges against Chinese telecommunications giant Huawei at the Department of Justice January 28, 2019 in Washington, DC. The Justice Department is charging Huawei and its American affiliate with theft of trade secrets, wire fraud, and obstruction of justice. The recent arrest of Huawei CFO Meng Wanzhou in Canada has strained relations between the United States and China as the Trump administration seeks to have her extradited to the U.S. Chip Somodevilla/Getty Images/AFP

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.

‘Bonuses for stealing tech secrets’

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.”

© Agence France-Presse