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US charges Huawei with 23 crimes including Iran sanction-busting, technology theft, fraud

The charges came ahead of negotiators from the two countries meeting here on later in the week to resume talks to resolve trade tensions triggered by President Donald Trump’s tariffs on steel and aluminum at first and subsequently on billions worth of imports from China, which has retaliated.

world Updated: Jan 30, 2019 08:22 IST
Yashwant Raj
Yashwant Raj
Hindustan Times, Washington
US,Huawei,charges
US authorities unveiled Monday a sweeping set of 23 criminal charges against the Chinese telecom giant Huawei Technologies Co . (File Photo)(AP)

US authorities unveiled Monday a sweeping set of 23 criminal charges against the Chinese telecom giant Huawei Technologies Co in a new escalation of tensions between the United States and China that are slated to resume trade talks this week.

The charges contained in two indictments announced Monday accused Huawei and its chief financial officer and owner’s daughter Meng Wanzhou, who is the custody of Canadian authorities on an extradition request from the US, with bank fraud, violation of US sanctions on Iran, theft of trade secrets and obstruction of justice.

The charges came ahead of negotiators from the two countries meeting here on later in the week to resume talks to resolve trade tensions triggered by President Donald Trump’s tariffs on steel and aluminum at first and subsequently on billions worth of imports from China, which has retaliated in equal measure. Trump is expected to meet Chinese Vice Premier Liu He, who is leading the Chinese delegation, some time during the talks.

“Today we are announcing that we are bringing criminal charges against telecommunications giant Huawei and its associates for nearly two dozen alleged crimes” acting attorney general Matthew G. Whitaker told reporters at a news briefing. “As I told Chinese officials in August, China must hold its citizens and Chinese companies accountable for complying with the law.”

Huawei has said it was disappointed by the charges and its request to the US department of justice to discuss the case against Meng was “rejected without explanation”.

In Beijing, government spokesperson Geng Shuang said US charges were driven by “political motivations” and added that, “We urge them to treat Chinese enterprises in a fair and just way.”

Beijing has imprisoned two Canadians and sentenced a third Canadian held on drug-smuggling charges to death in apparent retaliation to Meng’s arrest in Canada, but Chinese authorities have denied they were linked.

The first indictment containing 13 charges, returned by a New York grand jury, Huawei and other defendants, including Meng, pertain to the company’s businesses and dealings in Iran, and its efforts to circumvent US sanctions. It is alleged to have misled multiple global banks and the United State about its ties to Skycom, an Iranian affiliate that it claimed was a separate company after Huawei sold its stakes in it, in 2007.

When, in fact, the United states has alleged Huawei had sold Skycom to itself, through a company it controlled. “As part of this scheme to defraud, Meng allegedly personally made a presentation in August 2013 to an executive of one of Huawei’s major banking partners in which she repeatedly lied about the relationship between Huawei and Skycom,” the US department of justice said in a statement on the indictment.

The Chinese telecom giant, which relied on global banks to process its US dollar transactions through the US, lied to these institutions which would have otherwise refused to process them given US laws and regulation on companies doing business with Iran, in violation of its sanctions. One bank, the indictment said, cleared more $100 million of Skycom-related transactions through the United States between 2010 and 2014, years of a crippling sanctions regime imposed and enforced by the UN and the United States. The sanctions were lifted in 2015 following an agreement to halt Iran’s nuclear programme. President Trump reimposed the sanctions in 2018, but these are US curbs, with no backing from the UN.

In the second indictment, returned by a grand jury in Seattle, Washington, Huawei Device Co., Ltd. and Huawei Device Co. USA are accused of 10 charges related to theft of trade secrets, wire fraud and obstruction of justice.

The affiliates are accused to trying to steal information on a robot used by T-Mobile, a US company, to test phones, called “Tappy”. Huawei personnel are alleged to have taken pictures of the device and measurements and even tried to steal a piece from it for Huawei engineers to duplicate.

When caught, Huawei blamed the theft on “rogue actors”, the US department of justice said, and sought to deny the company’s role in it. But prosecutors have said it was in fact a part of a company-wide effort and alleged Huawei actually rewards employees for stealing trade secrets.

Huawei has been blocked from selling telecommunications equipment in the United States since a 2012 congressional report raised fears of its products being used to spy on Americans. Many other countries remained suspicious of the company,

India has harboured similar reservations about the company, but allowed it to participate in field trials of 5G equipment last December.

First Published: Jan 29, 2019 23:52 IST

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