China’s Huawei Technologies accused of conspiring to steal trade secrets


Updated

January 29, 2019 10:20:36

The United States Justice Department has unsealed two indictments against China’s Huawei Technologies, several of its subsidiaries and its chief financial officer Meng Wanzhou.

Key points:

  • United States prosecutors allege Huawei misappropriated robotic technology from T-Mobile
  • Ms Meng’s arrest has chilled relations between China and Canada
  • The US Government is trying to prevent American companies from buying Huawei routers and switches and is pressing allies to follow suit

The cases accuse the company of everything from bank and wire fraud to obstructing justice and conspiring to steal trade secrets from T-Mobile US Inc.

Ms Meng, the daughter of Huawei founder Ren Zhengfei, was arrested in Canada last year over alleged violations of US sanctions in Iran.

United States prosecutors allege that Huawei used a Hong Kong shell company called Skycom to sell equipment in violation of the sanctions, and Ms Meng allegedly misled US banks into believing the two companies were separate, according to the Justice Department.

The US said it would proceed with her formal extradition, a move certain to ratchet up tensions with China.

“As you can tell from the number and magnitude of the charges, Huawei and its senior executives repeatedly refused to respect US law and standard international business practices,” said FBI Director Chris Wray.

“Today’s charges serve as a warning that the FBI does not and will not tolerate business that violates our laws, obstructs our justice and jeopardises our national security.”

Prosecutors also allege that Huawei stole trade secrets, including the technology behind a robotic device that T-Mobile used to test smartphones.

T-Mobile had accused Huawei of stealing the technology, called “Tappy”, which mimicked human fingers.

Huawei said the two companies settled their disputes in 2017.

Mr Wray said the cases exposed “Huawei’s brazen and persistent actions to exploit American companies and financial institutions, and to threaten the free and fair global marketplace”.

He also flagged concerns over the use of Huawei devices in US telecommunication networks.

“That kind of access could give a foreign government the capacity to maliciously modify or steal information, conduct undetected espionage, or exert pressure or control,” he said.

David Martin, Ms Meng’s lawyer in Canada, did not immediately respond to a message seeking comment.

Ms Meng is out on bail in Vancouver and is due back in court next month as she awaits extradition proceedings to begin.

Huawei case sparks a diplomatic spat

The Huawei case has set off a diplomatic spat with the three nations, which has threatened to complicate ties between the United States and Canada.

Relations between China and Canada turned frosty after the arrest, with China detaining two Canadian citizens and sentencing to death a Canadian man previously found guilty of drug smuggling.

On Sunday, Canadian Prime Minister Justin Trudeau fired Canada’s ambassador to China, John McCallum, after the envoy said it would be “great” if the US dropped its extradition request for Ms Meng.

In addressing the indictments on Tuesday (local time), acting US Attorney-General Matt Whitaker said the nation needed “more law enforcement cooperation with China”.

“China should be concerned about criminal activities by Chinese companies and China should take action,” he said.

The charges add to pressure on Huawei — the world’s biggest telecommunications equipment maker, which has long been seen as a front for spying by the Chinese military or security services — from the United States Government, which is trying to prevent American companies from buying Huawei routers and switches and is pressing allies to follow suit.

The indictments come just days before US-China trade talks are set to resume in Washington, although Commerce Secretary Wilbur Ross said the two cases were “wholly separate” from the trade negotiations.

US President Donald Trump previously said he would get involved in the Huawei case if it would help produce a trade agreement with China.

AP/Reuters

Topics:

law-crime-and-justice,

science-and-technology,

computers-and-technology,

internet-technology,

united-states,

china

First posted

January 29, 2019 08:54:05



Source link Business News Australia

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