US Slaps 13 Charges on Huawei, Executive Over Iran Sanctions Violations

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.

The indictment was unsealed as China’s top trade negotiator arrived in Washington for high-stakes talks with US officials, possibly complicating the discussions ahead of a March deadline to avert a deepening of their trade war.

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.

China reacted furiously, saying there were “strong political manipulations” behind the case against Huawei.

In a statement sent to AFP, Huawei denied “that it or its subsidiary or affiliate have committed any of the asserted violations of US law set forth in each of the indictments.”

The firm “is not aware of any wrongdoing by Ms Meng (Wanzhou), and believes the US courts will ultimately reach the same conclusion,“ it added.

Extradition Request

Meng—who was arrested in Vancouver on Dec 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.

Late Monday, Canada’s Justice Department confirmed that officials had received a formal extradition request from the US, reported Canadian broadcaster CBC, with a hearing set for Feb 6.

Acting US Attorney General Matthew 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.”

The Chinese foreign ministry accused Washington of using “state power to discredit and crack down on specific Chinese companies in an attempt to strangle the enterprises’ legitimate and legal operations”.

“There are strong political motivations and political manipulations behind the actions,“ ministry spokesman Geng Shuang said in a statement, urging Washington to stop “the unreasonable suppression of Chinese companies including Huawei”.

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.

Beijing renewed its demand for the US to drop its warrant against Meng and for Canada to release her.

‘Bonuses for stealing tech secrets’

The second case charged that Huawei made a concerted effort 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 as Chinese Vice Premier Liu He arrived in Washington on Monday to lead trade talks this week, according to Chinese state media.

Speaking together with Justice Department officials announcing the indictments, US 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.”

Photo Credit: Depositphoto

Huawei Exec Faces US Fraud Charges Linked to Iran, Court Hears

Chinese telecom giant Huawei's chief financial officer faces US fraud charges related to sanctions-breaking business dealings with Iran, a Canadian court heard Friday, a week after she was detained on an American extradition request.

Meng Wanzhou was arrested in Canada's Pacific coast city of Vancouver on December 1 while changing planes during a trip from Hong Kong to Mexico—ratcheting tensions between the United States and China just as the countries' leaders agreed a truce in their trade war.

A Canadian government lawyer asked the court to deny her bail, saying she has been accused of "conspiracy to defraud multiple financial institutions" and if convicted faces more than 30 years in prison.

She is specifically accused of lying to US banks about the use of a covert subsidiary to sell to Iran in breach of sanctions.

The lawyer said that Meng had personally denied to American bankers any direct connections between Huawei and the subsidiary, SkyCom, when in fact "SkyCom is Huawei." SkyCom's alleged sanctions breaches occurred from 2009 to 2014.

He suggested that Meng has also shown a pattern of avoiding the United States over the past year since becoming aware of the investigation into the matter, argued that she has no ties to Canada and has access to vast wealth and political connections—and thus poses a flight risk.

Meng's detention in Canada came on the day of a summit at which US President Donald Trump and his Chinese counterpart Xi Jinping agreed to a truce in the escalating trade dispute opposing the two economic powerhouses.

China says Meng—the daughter of Huawei founder Ren Zhengfei, a former engineer in China's People's Liberation Army—has violated no laws in Canada or the United States and has demanded her release.

Washington and Beijing have exchanged steep tariffs on more than USD 300 billion in total two-way trade, locking them in a conflict that has begun to eat into profits.

Trump tweeted Friday that negotiations to defuse the high stakes dispute were "going very well" but the messages since Meng's arrest have been mixed, roiling global stock markets.

Her appearance at the British Columbia Supreme Court in Vancouver is a prelude to an extradition process that could take months.

'Princess' of Huawei

CNN, quoting an unnamed official, said the United States saw the arrest as providing leverage in US-China trade talks—although White House trade advisor Peter Navarro has denied any link to the dialogue.

On Friday, Beijing nevertheless alleged that Meng, known internally as the "princess" of Huawei and possible heir to the throne, had become a pawn in the dispute.

"The Chinese government should seriously mull over the US tendency to abuse legal procedures to suppress China's high-tech enterprises," said the nationalist tabloid Global Times in an editorial.

"Obviously, Washington is resorting to a despicable rogue's approach as it cannot stop Huawei's 5G advance in the market," it went on.

Meng spent most of the past week at a women's detention facility in a suburb of Vancouver.

If she is released on bail, she would likely have to surrender her passport and submit to electronic monitoring until she is discharged or surrendered for trial to the United States. All security costs would be borne by her.

The extradition process could take months, even years, if appeals are made in the case. The Vancouver Sun reported on Friday that Meng's husband Xiaozong Liu is believed to own at least one luxury home in the city.

Repeated Setbacks

Canada is one of more than 100 countries that have an extradition treaty with the United States, requiring it to cooperate with US Department of Justice requests to hand over suspects.

This longstanding treaty requires that the offense for which extradition is being sought is also a crime in Canada.

A Canadian court must decide if there is sufficient evidence to support the extradition, but then it is left to Canada's justice minister to sign the order.

On Thursday, Prime Minister Justin Trudeau defended Canada's arrest of Meng, saying politics played no part in the decision.

"I can assure everyone that we are a country (with) an independent judiciary," Trudeau told a tech conference in Montreal.

Huawei's affordable smartphones have made strong inroads in the developing world, but the company has faced repeated setbacks in major Western economies over security concerns.

Earlier this week, Canadian officials said Ottawa was continuing to review Huawei's technology for use in upcoming fifth generation networks.

The company faces being shut out of Australia, New Zealand and US 5G rollouts, and British telecom group BT revealed on Wednesday it was removing Huawei equipment from its core cellular network.

The five nations together form the "Five Eyes" intelligence alliance.

Photo Credit: Wikicommons