U.S. Huawei charges test trade deal appetite

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The Department of Justice has announced a 13-count indictment against Chinese company Huawei, as well as Huawei Device USA, its Iranian subsidiary Skycom Tech, and Huawei CFO Wanzhou Meng.

The announcement came as US officials are scheduled to meet with representatives of the Chinese government this week to try broker an elusive trade agreement and end the prolonged tariff war between the two economic giants.

Skycom, which is based in Hong Kong did business in Iran on behalf of Huawei, he alleged.

Ms Meng was arrested in Canada last month on a United States request for allegedly evading sanctions on Iran. She is the CFO and deputy chairwoman of Huawei Technologies as well as the daughter of the company's founder, Ren Zhengfei.


Huawei did not immediately respond to Gizmodo's request for comment on the charges and related allegations. She is free on bail in Vancouver, British Columbia, pending extradition proceedings. And that proved to be a big blow to Huawei's plans to expand its phone business in the US, as the majority of smartphones bought in this country are sold through wireless carriers.

The Justice Department on Monday charged China's largest smartphone maker with bank fraud and stealing trade secrets, in a move that will likely heighten already-elevated tensions between the USA and Beijing. U.S. prosecutors are also alleging that the company committed bank fraud by violating sanctions against doing business with Iran.

Acting US Attorney General Matthew Whitaker also confirmed that the department planned to file for extradition of Meng, who was detained by Canadian authorities at the request of the US in December. "China should be concerned about criminal activities by Chinese companies - and China should take action".

The indictments unsealed on Monday, US officials said, were the result of lengthy investigations and included almost two dozen charges.


The case dates back to 2014, when T-Mobile filed a lawsuit in U.S. District Court in Seattle, alleging Huawei stole designs and parts of the company's top secret cell phone testing robot, nicknamed "Tappy".

"The conspiracy to steal secrets from T-Mobile was a companywide effort involving many engineers and employees within the two charged companies", said Hayes.

The Huawei case has set off diplomatic spats among the United States, China and Canada.

The indictment also says that Huawei relied on global banking relationships for financial services including processing US-dollar transactions through the US. US Commerce Sercetary Wilbur Ross insists the Huawei cases are "wholly separate" from trade negotiatons. Trump has postponed a scheduled increase in USA tariffs on $200 billion of Chinese goods from 10 percent to 25 percent during the talks. If so, they would likely be scheduled months later.


"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. In past instances, the United States government has singled out Beijing in corporate or digital espionage and has recently charged several Chinese hackers and intelligence officials.

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