US accuses Huawei of stealing trade secrets, defrauding banks
29 January, 2019, 05:57 | Author: Lawrence Cooper
The charges filed Monday also mark an escalation of tensions between the world's two largest economies, which are mired in a trade war that has roiled markets. Watch live in the player above. The indictment charges Huawei, Huawei Device USA Inc., Skycom and Meng with bank fraud and conspiracy to commit bank fraud, wire fraud and conspiracy to commit wire fraud, violations of the International Emergency Economic Powers Act (IEEPA) and conspiracy to violate IEEPA, and conspiracy to commit money laundering. The Washington indictment comes almost two years after a jury awarded T-Mobile $4.8 million in damages in a long-running trade secrets dispute centered around a smartphone testing robot that Bloomberg reports caught the eye of federal authorities.
Meng was arrested in Vancouver and later released on bail in December and faces extradition to the United States. It also accuses the company's CFO, Meng Wanzhou, of lying about Huawei's relationship with the Iranian company Skycom, which it says violated American sanctions prohibiting USA banks from processing transactions connected to Iran.
He said the 13 counts of bank and wire fraud relate to Huawei's claim that its affiliate operating in Iran, Skycom, was a separate, unrelated company.
This story is developing and will be updated. Huawei has said the two companies settled their disputes in 2017.
Skycom, which is based in Hong Kong did business in Iran on behalf of Huawei, he alleged.
These are law enforcement actions and are wholly separate from our trade negotiations with China.
Meng was arrested in Canada last month at the behest of the USA government, which issued an arrest warrant for the executive. Canadian authorities have yet to decide if she will be extradited to the United States.
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Acting Attorney General Matt Whitaker, center, with Commerce Secretary Wilbur Ross, left, and FBI Director Christopher Wray speak Monday, Jan. 28, 2019, at the Justice Department in Washington.
During this afternoon's press conference, Federal Bureau of Investigation director Christopher Wray said the charges show Huawei's "brazen and persistent actions to exploit American companies and financial institutions and to threaten the free and fair global marketplace".
Matthew Whitaker, the acting attorney general, said grand juries in Seattle and NY had indicted Huawei, its affiliates and its chief financial officer on 23 criminal charges.
Prosecutors in Manhattan said that Huawei concealed its relationship with Skycom Tech Co.
And it was unsealed on the very day that the Trump administration announced new high-level trade talks with China, fuelling questions about whether the two are linked - questions the White House batted down.
"It is public record that under Chinese cybersecurity law, Chinese companies like Huawei are required to provide, essentially, access upon demand with little to no process to challenge that", Wray said. Meng's arrest sparked outrage in China, which called for her immediate release and condemned the move as a US - led effort to thwart the telecom giant and constrain China's global ambitions.
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A Huawei spokesperson said: " Vodafone and Huawei are long-term strategic partners that have worked together since 2007". Completely banning Huawei's radio network would lead to a "a significant delay" in the launch of 5G networks in the UK".
Microsoft said in a statement that Bing's service has been restored in China after it had been inaccessible, without elaboration. Bing's rival Google shut down its search engine in China in 2010, after rows with the authorities over censorship and hacking.
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