American prosecutors have unveiled criminal charges against Huawei, accusing one of China’s top companies of violating sanctions against Iran and stealing trade secrets.
The 23 charges filed on Monday drew a sharp response from China and threatened to escalate tensions between Washington and Beijing just as a Chinese delegation led by Vice Premier Liu He arrived in the US capital for trade talks.
Matthew Whitaker, the acting US attorney general, said Huawei had attempted to evade sanctions against Iran by setting up a separate company called Skycom, which fraudulently conducted more than $100m (£76m) worth of transactions through the US financial system over four years.
Mr Whitaker said Huawei had lied to the US government to obstruct investigations, moved potential witnesses back to China, and misled banks to continue to process transactions.
In a second set of charges, the Justice Department said the company had attempted to steal technology from the US telecoms network T-Mobile. Employees of a US subsidiary allegedly attempted to steal details of a robot arm named Tappy used to test smartphone touchscreens.
The charges related to Iran include one against Meng Wanzhou, Huawei’s chief financial officer, who was arrested in Canada last month and faces US extradition. A request is due to be sent to the Canadian government by a deadline of this Wednesday.
“By claiming that Skycom was a separate company - and not an affiliate which Huawei controlled - Huawei allegedly asserted that all of its Iran business was in compliance with American sanctions,” Mr Whitaker said.
This charges are the latest move from the US pressing China on the issue of corporate espionage and intellectual property theft. The US, UK, and other governments have warned such activity poses a major national and economic security threat.
Huawei represents China’s technology ambitions and in many ways reflects the country’s rise on the global stage. It is also at the heart of security fears surrounding Chinese firms, given worries over privacy and hacking and whether these companies – though private – could act on behalf of Beijing.
Some countries and national carriers – including the UK – have dropped use of Huawei equipment in telecoms infrastructure networks over those concerns.
Huawei said on Tuesday it was “disappointed” with the US allegations against the company, and denied it violated US laws and any misconduct by Ms Meng.
“Huawei believes that US courts will eventually reach the same conclusion,” the company said in a statement.
Beijing’s reaction has largely stemmed over concerns that the West is using such allegations and the trade negotiations to control China’s rise.
The Foreign Ministry accused the US of using its “state power to disgrace and crack down on certain Chinese companies in an attempt to stifle and to kill the lawful operations of these companies,” according to the statement.
Chinese authorities issued another thinly veiled warning to Ottawa for having cooperated with the US in arresting Ms Meng, after again demanding for her release, and vowing to resolutely protect the interests of Chinese companies.
US officials insisted the Huawei charges were unrelated to trade talks between with China. “These indictments are law enforcement actions and wholly separate from our trade negotiations,” said Wilbur Ross, the US commerce secretary.
However, he said Chinese firms had spent years undermining US sanctions and exploiting the US financial system.
Sarah Sanders, the White House press secretary, also denied any link between the charges and this week’s talks. “Those two things are not linked. They are a totally separate process,” she said during a briefing.