The United States announced criminal charges against Huawei Technologies CFO Meng Wanzhou, mounting pressure on the world’s top telecom equipment maker.
The Justice Department charged Huawei and its chief financial officer Meng Wanzhou with conspiring to violate US sanctions on Iran by doing business with Tehran via a subsidiary it tried to hide, Reuters reported.
In a separate case, the Justice Department said Huawei stole robotic technology from T-Mobile, the third largest telecom operator in the US. Huawei said that the two companies settled their disputes in 2017.
# Stoles trade secrets from T-Mobile
# Huawei refused to respect US law
# Huawei subsidiary committed wire fraud
# Huawei subsidiary conspired to launder money
# Huawei violated International Emergency Economic Powers Act (IEEPA) by doing business with Iran
# Huawei CFO committed fraud by lying to banks
Canada arrested Meng Wanzhou, who is the daughter of Huawei’s founder Ren Zhengfei, in December and she is facing extradition to the United States. The charges against Meng Wanzhou, which include bank and wire fraud, were not unsealed until Monday.
China had arrested two Canadians on national security grounds responding to the development in Canada.
Beijing and Washington are engaging in talks this week as part of negotiations intended to walk back trade tensions between the globe’s two largest economies.
US Commerce Secretary Wilbur Ross said the Huawei charges are “wholly separate” from the trade negotiations.
US authorities said Meng has a lead role in the scheme to use a subsidiary to conduct business in Iran in violation of US sanctions against Tehran. Meng Wanzhou has said that she is innocent.
CNBC reported that the document also gives clues as to why Meng herself was arrested in Canada, and how the U.S. will position its request for her extradition from Vancouver. The allegations say Meng traveled through New York’s John F. Kennedy International Airport in early 2014, “several months” after meeting with an executive from one of the banks.
She allegedly had on one of her electronic devices a text message of “suggested talking points,” according to the Justice Department, which read in part: “The core of the suggested talking points regarding Iran/Skycom: Huawei’s operation in Iran comports with the laws, regulations and sanctions as required by the United Nations, the United States and the European Union.”
That financial institution later decided to sever its relationship with Huawei over its possible Iranian relationships through Skycom. The company then went on to misrepresent the reasons for that bank ending the relationship, according to the indictment.
President Donald Trump said in December he could intervene in the case if it would serve national security interests or help close a trade deal with China.
The Trump administration is trying to prevent American companies from buying Huawei routers and switches and pressing friendly nations to do the same. US security experts are concerned that the telecom equipment could be used to spy on the United States.
Some countries have already blocked or indicated to block Huawei from supplying its 5G network equipment. Recently, Vodafone CEO Nick Read said it would be very costly for all European telecoms to block Huawei from their core networks. Vodafone is just pausing the use of Huawei in its core network.
Huawei’s founder Ren Zhengfei denies his company’s products would be used by the Chinese government to spy.
FBI Director Christopher Wray said the Huawei cases, which were filed in New York and Washington state, “expose Huawei’s brazen and persistent actions to exploit American companies and financial institutions, and to threaten the free and fair global marketplace.”
He also said he is concerned about Huawei devices in US telecommunications networks. “That kind of access could give a foreign government the capacity to maliciously modify or steal information, conduct undetected espionage, or exert pressure or control.”
Acting Attorney General Matthew Whitaker said the alleged criminal activity at Huawei “goes back at least 10 years and goes all the way to the top of the company.”
US has already blocked Huawei and ZTE from supplying their network to US-based telecom operators.