US federal prosecutors went after Chinese telecommunications giant Huawei for financial fraud in a sweeping 13-count indictment unsealed Monday, and announced 10 additional charges against Huawei and its US subsidiary for allegedly stealing trade secrets. Both indictments could escalate tensions between Washington and Beijing — right as the two try to sort out their trade war.
The first indictment alleges that Huawei and one of the company’s subsidiaries, Skycom Tech Co. Ltd., engaged in bank fraud and wire fraud and evaded US sanctions against Iran.
Prosecutors also charged Huawei’s CFO Wanzhou Meng in the indictment, including with bank and wire fraud. Meng, who is the daughter of Huawei’s founder, was detained by Canadian authorities in December, at the request of US law enforcement who is seeking her extradition. China has since retaliated, detaining multiple Canadian citizens, including sentencing one to death for alleged drug trafficking.
The second indictment alleges, that, starting in 2012, Huawei tried to steal trade secrets from T-Mobile. The case stemmed from a 2014 civil suit, according to the New York Times.
China has previously criticized the US’s efforts to crack down on Huawei. “One country has the right to protect the information security of its own, but that gives it no reason to impede or even strangle the lawful and legitimate operations of an enterprise, just based on some non-existent excuses and by the pretext of security,” Chinese Foreign Ministry spokesperson Geng Shuang said at a press conference on Monday in response to a question about the US pressuring allies to reconsider its ties to Huawei.
But President Donald Trump’s administration and many Republican and Democratic lawmakers disagree, and see Huawei as a serious threat to US national security and business interests. Huawei is banned from bidding on US contracts over fears Chinese intelligence will use it as a backdoor to spy on the US. The US has also been pressuring allies to reject plans for Huawei’s 5G network — a next-generation version of mobile network technology — which the administration fears will hasten China’s global dominance.