US files criminal charges against Huawei over sanctions violations and technology theft

The United States has announced that it is filing criminal charges against China’s Huawei Technologies Co Ltd, pushing a fight against the world’s biggest telecommunications equipment maker. However, Huawei denies of any wrongdoings and this comes days before the trade talks with Beijing. 

The Justice Department has charged Huawei and its chief financial officer for conspiring and violating U.S. sanctions on Iran by doing business through a subsidiary it tried to hide. The Justice Department has also filed a case against Huawei claiming that it stole robotic technology from T-Mobile US Inc. However, the company said that it settled their dispute in 2017.

Huawei said it was “disappointed” to learn of the charges. It said it had sought to discuss them with U.S. authorities “but the request was rejected without explanation.” The Company denies that it or its subsidiary or affiliate have committed any of the asserted violations, is not aware of any wrongdoing, and believes that the U.S. courts will ultimately reach the same conclusion.

China’s foreign ministry expressed “grave concern” and urged the United States drop the arrest warrant of the CFO Meng Wanzhou, the daughter of Huawei’s founder and end “unreasonable suppression” of Chinese companies. This new development is most likely to upset talks between Beijing and Washington. The U.S. Commerce Secretary said the charges are “wholly separate” from the trade negotiations.

It is unclear how the U.S. charges would impact Huawei’s business. Back in 2017, Chinese peer ZTE Corp was prevented from buying essential components from U.S. firms after pleading guilty to similar charges. However, ZTE resumed back to business after paying up to $1.4 billion in fines and replacing its entire board, on top of a near $900 million penalty paid in 2017.

Acting Attorney General Matthew G. Whitaker said:

Today we are announcing that we are bringing criminal charges against telecommunications giant Huawei and its associates for nearly two dozen alleged crimes. As I told Chinese officials in August, China must hold its citizens and Chinese companies accountable for complying with the law.  I’d like to thank the many dedicated criminal investigators from several different federal agencies who contributed to this investigation and the Department of Justice attorneys who are moving the prosecution efforts forward. They are helping us uphold the rule of law with integrity.