The day of reckoning has come for Huawei, as the U.S. Justice Department has unsealed a 13-count indictment against the world’s largest telecommunications equipment manager.
Justice Department Charges Huawei
The indictment alleges that Huawei, two affiliated companies, and its chief financial officer Meng Wanzhou committed fraud and conspiracy in connection with deals in Iran.
Commerce Secretary Wilbur Ross stressed:
These are law enforcement actions and are wholly separate from our trade negotiations with China.
An indictment filed in Washington state accused the company of stealing trade secrets from T-Mobile USA Inc. and offering bonuses to employees who succeeded in getting technology from rivals, according to Bloomberg.
Huawei’s Meng is expected to be on the receiving end for her alleged role in helping her company cover up sanctions violations related to Iran.
In December, Meng was detained in Vancouver at the request of the U.S., who continues to work to extradite her.
Tangling with T-Mobile Brings Huawei Problems
Based in China, Huawei is the second-largest maker of smartphones worldwide, according to the Wall Street Journal. At issue are allegations that Chinese companies are stealing intellectual property from U.S. tech companies.
Civil lawsuits have been stacking up against Huawei since 2014. One is from T-Mobile, and its filing is considered to be one of the primary catalysts for the Justice Department’s investigation.
In the T-Mobile case, Huawei was charged with misappropriating robotic technology from one of T-Mobile’s labs located in Bellevue, Washington. However, Huawei claimed that the matter was resolved in an undisclosed settlement in 2017.
Prosecutors said Monday that Huawei took photos of the robots, measured them, and stole pieces of them.
Huawei also maintains that it was an isolated incident that involved two employees who acted inappropriately.
The Justice Department didn’t buy it, and federal prosecutors pursued criminal charges.
Bad Timing for U.S.-China Trade Negotiations
Observers had worried that any charge could affect trade war negotiations between the U.S. and China.
CCN reported that the alleged criminal investigation could widen the chasm between American and Chinese trade delegates. This is unfortunate because it seemed the U.S. and China were finally making important progress on a bilateral trade deal.
Beijing has made it clear that it is deadly serious about the Huawei dispute after it applied the death penalty to a Canadian citizen accused of drug smuggling. In a hurried retrial, Robert Lloyd Schellenberg was sentenced to death this month after originally receiving a 15-year prison sentence in 2016.
The U.S-China trade war and the economic slowdown in China have made it tougher for new and growing companies in China, CCN reported, despite the surge in investment money coming from venture capitalists located in the U.S.
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