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Home / Business / Huawei: The US charges fraud with a Chinese company and steals business secrets

Huawei: The US charges fraud with a Chinese company and steals business secrets



The US Attorney's Office investigated Chinese telecommunications giant Huawei for financial fraud in a statement released on 13 charges on Monday and announced ten additional charges against Huawei and her US subsidiary for allegedly stealing business secrets. Both charges could escalate tensions between Washington and Beijing – just as the two try to dispel their trade war.

The first indictment alleges that Huawei and one of its affiliates, Skycom Tech Co. Ltd., were involved in bank fraud and fraud and circumvented US sanctions against Iran.

The prosecution also accused Huawei CFO Wanzhou Meng in the indictment, including bank and bank fraud. Meng, the daughter of Huawei's founder, was arrested by the Canadian authorities in December at the request of US law enforcement agencies seeking their extradition. China has since taken revenge and jailed several Canadian citizens, including those sentenced to death for alleged drug trafficking.

The second indictment claims that Huawei attempted to steal business secrets from T-Mobile from 201

2 onwards. According to the New York Times, the case came from a civil lawsuit filed in 2014.

China has previously criticized US efforts to prevail against Huawei. "A country has the right to protect information security itself, but there is no reason to obstruct or even curtail a company's legitimate and legitimate operations, just because of some nonexistent excuses and under the pretense of security." Chinese Foreign Ministry spokesman Geng Shuang said at a press conference on Monday whether the US would urge its allies to rethink their relations with Huawei.

However, President Donald Trump's government and many Republican and Democratic lawmakers disagree and see Huawei as a serious one Threatening US National Security and Business Interests Huawei must not renounce US contracts because fears of Chinese intelligence are used as a backdoor to spy on the US The US has also urged allies to make plans for the 5G network of Huawei – a next generation mobile technology – which, according to the administration of China, will accelerate global dominance.

"These allegations included the obvious disregard of our country's laws and Huawei's usual global business practices," FBI Director Christopher Wray said in a statement. "Companies like Huawei pose a double threat to our economic and national security, and the amount of these charges highlights how seriously the FBI is taking this threat."

What is in Huawei-Meng's big indictment?

The bulk of the charges are from a Huawei system designed to obscure its operations in Iran, a violation of US sanctions against the Middle East [19659010] since about 2007.

Huawei allegedly lied about his relationship with a subsidiary called Skycomm Inc, which was doing business in Iran. Huawei misrepresented the relationship with US banks, which would have been legally unable to do business with the telco giant if they knew it. Instead, Huawei was able to make millions of dollar transactions, all of which were governed by US law.

"These alleged false claims led banks to do business with the company and unknowingly violate our laws," said Attorney General Matthew Whitaker at a press conference on Monday.

According to the prosecutors, Meng also lied about the relationship between Huawei and Skycomm, including a presentation in 2013 of one of Huawei's key banking partners.

The prosecutors also say when Huawei learned about this investigation in 2017, the company tried to impede justice by "destruction and concealment of evidence."

Both this indictment and T-Mobile's are big deals. Huawei is one of the world's largest tech companies, and has been expanding its reach globally through its consumer electronics and telecommunications products, especially through its 5G network.

As Emily Stewart of Vox wrote in December, following Meng's arrest in December, Canada:

For years, congressional committees, the FBI, the National Security Agency, and others have been pointing to close relations between Huawei and the Chinese Communist Party (CCP) and the US even banned the company from giving up government contracts. At a US Senate intelligence committee hearing, leading US intelligence chiefs, Huawei and another Chinese technology company, ZTE, reported potential national security risks to the US and warned American companies against doing business with them.

These recent indictments are forcing to confirm suspicion of the practices of Huawei in the US and abroad. In addition, they come when the US and China, after months of tariffs, also try to conclude a trade agreement – and these measures against one of the largest Chinese companies could complicate this effort.

It is still a "warning shot" for Beijing, which has serious global repercussions.

Read the indictment from Huawei / Skycomm below or at this link.

Read the indictment from Huawei / T-Mobile at this link.


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