Huawei Criminal Charges Cast Pall Over US-China Trade Talks

Minnie Murray
February 1, 2019

Meng's father - 74-year-old Huawei founder Ren Zhengfei - had spearheaded a rare recent charm offensive by the famously secretive company to salvage its reputation amid mounting espionage concerns.

The Chinese government will "firmly defend" its companies, a foreign ministry statement said.

The 13-count indictment, which includes allegations against Huawei, Huawei USA and Skycom Tech in addition to Meng, charges that the defendants conspired to commit bank fraud and then did commit that fraud against four global banks with operations in the United States and the European Union.

Liu He, Chinese vice-premier and chief economic adviser, arrived in Washington earlier this week for the talks.

Canada now has a month to decide whether the US's formal extradition request is strong enough, and during Tuesday's hearing, Justice William Ehrcke delayed the next hearing by a month, to 6 March.

"In terms of Canada's interest, it would be in our interest to have the extradition process resolved as quickly as possible, so we know what we're dealing with" in rebuilding trade ties with China, McCuaig-Johnston said.

"We strongly urge the USA to stop the unreasonable suppression of Chinese companies including Huawei, and to treat them fairly and objectively". But Huawei says the scrutiny has had little impact on its business elsewhere.

Huawei chief financial officer Meng Wanzhou is out on bail and remains under partial house arrest.

As alleged in the indictment, beginning in 2007, Huawei employees lied about Huawei's relationship to a company in Iran called Skycom, falsely asserting it was not an affiliate of Huawei.

"I am encouraged by the Justice Department's actions against Huawei Technologies, which detail the company's brazen efforts to steal corporate trade secrets, commit fraud, and obstruct justice", said Burr.

In other allegations prosecutors claim that Huawei's founder falsely told the Federal Bureau of Investigation in 2007 that Huawei had no direct dealings with any Iranian company.

In December, Canada arrested Huawei's CFO, Meng Wanzhou; the U.S. wants to prosecute her for bank fraud. She still faces extradition to the US. "We urge Canada to take China's solemn position seriously, immediately release Ms. Meng Wanzhou and ensure her lawful and legitimate rights and interests, and stop risking its own interests for the benefits of the United States", the statement said. At issue: T-Mobile's proprietary testing robot named Tappy that Huawei allegedly copied.

Huawei executive Meng Wenzhou arrives at BC Supreme Court, in Vancouver, BC., January 29, 2019.

China has arrested two Canadians and sentenced a third to the death penalty since Meng appeared in court.

The alleged conduct described in the indictment occurred from 2012-2014, and includes an internal Huawei announcement that the company was offering bonuses to employees who succeeded in stealing confidential information from other companies, according to the Justice Department. Her ar‌res‌t outraged the Chinese government and thrusted Canada in a hard position - especially after the detainment of 13 Canadians in China, which analysts describe as an act of retaliation.

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