On Monday, the Department of Justice (DOJ) held a press conference to announce that it is seeking criminal charges against Huawei, China’s mobile manufacturing giant. The company and its CFO, Meng Wanzhou, who is the daughter of Huawei founder and president Ren Zhonghe, are accused of bank and wire fraud, money laundering and conspiracy. In addition, Huawei is accused of obstructing justice.
At the news conference, FBI head Christopher Wray stated that the charges “lay bare Huawei’s alleged blatant disregard for the laws of our country and standard global business practices.” Not surprisingly, Huawei insists it’s innocent of all charges.
The DOJ claims that Huawei, Meng and a Hong Kong-based Huawei subsidiary named Skycom Technologies, committed wire fraud by violating the United States’ trade sanctions against Iran.
Stealing Trade Secrets
In 2014, T-Mobile, the number three (3) wireless service provider in the U.S., slapped Huawei with a civil suit. While a jury ruled in favor of Huawei, determining that T-Mobile didn’t suffer damages and Huawei didn’t engage in willful or malicious conduct, the DOJ wasn’t satisfied with the ruling. They’re convinced that Huawei stole information related to Tappy, a robot T-Mobile uses to test its smartphones.
Meng, who was arrested in Canada last month at the behest of the United States government, is accused of violating the aforementioned trade sanctions against Iran. After her arrest, the United States filed extradition paperwork, but Meng remains in Canada. A three-day bail hearing in Vancouver resulted in the court’s ruling that she was indeed a flight risk. While she was allowed to be released after posting a $7.2 million dollar bail, she is being closely monitored by the Canadian government and sports an electronic ankle bracelet.
Huawei’s tough year will probably get tougher
Reportedly, the White House is preparing an executive order to bar U.S. firms from using equipment supplied by Huawei and ZTE, another major Chinese telecom equipment manufacturer.
In addition, draft legislation is making the rounds in Congress that would make it illegal for U.S. companies to sell chips or other components to either Huawei or ZTE.
Both Australia and Japan have been lobbying telecom companies in their respective countries to steer clear of utilizing Huawei to advance their 5G initiatives. They fear the company’s equipment will result in spying by the Chinese government.
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