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Everything You Need to Know About the Huawei Probe by US Federal Prosecutors

Jan 17, 2019

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  • The Wall Street Journal reported late last night that Huawei Technologies Co. is the subject of a criminal probe by federal prosecutors that is, “at an advanced stage and could lead to an indictment soon,” according to sources familiar with the matter.  
     
  • Huawei, the world’s largest maker of telecommunications equipment and second-largest smartphone manufacturer, has long been criticized and suspected of stealing trade secrets and intellectual properties from foreign companies with some speculating of ties to the Chinese government.
     
  • In 2014, T-Mobile filed a lawsuit and alleged that Huawei employees stole a component containing intellectual property from T-Mobile's, “Tappy,” quality control testing robot. One employee would go on to admit that he, “took the component because Huawei’s research and development office believed the information would improve its own robot,” according to the lawsuit. The lawsuit eventually went to trial and, in 2017, a jury awarded T-Mobile USD$4.8mm after finding that Huawei breached its contract with the US network operator.
     
  • Criticisms of Huawei were reignited after Chief Financial Officer Meng Wanzhou was arrested by Canadian authorities at the request of US authorities on December 1st, 2018. The arrest was the result of allegations that Wanzhou helped cover up Iranian sanction violations by misleading multiple financial institutions about the nature of Huawei’s business operations in the country. 
     
  • Huawei criticisms were exacerbated last week when Polish authorities charged and arrested Huawei executive Wang Weijing for conducting espionage on behalf of the Chinese government. Huawei denied any connection to espionage conducted by Weijing and promptly terminated the employee.  
     
  • On Tuesday, Huawei founder Ren Zhengfei made a rare appearance before international media and fiercely denied claims of spying on behalf of the Chinese government. Zhengfei highlighted that Huawei is owned entirely by its employees and operates independently of the Chinese government.  
     
  • Yesterday, US lawmakers introduced legislation with bipartisan support that would effectively ban Chinese telecommunication companies who violate US export-control or sanctions laws from exporting telecommunication components to the US. The bipartisan group who introduced the legislation said that it is meant to target both Huawei and ZTE Corp., a Chinese telecommunications companies that violated sanctions against Iran and North Korea. Senator Chris Van Hollen, a Democrat from Maryland who sponsors the legislation, said that, “Both companies have repeatedly violated US laws, represent a significant risk to American national security interests, and need to be held accountable.”

 

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Sources: 

https://www.cnn.com/2019/01/16/business/huawei-criminal-probe-trade-secrets/index.html
https://www.wsj.com/articles/federal-prosecutors-pursuing-criminal-case-against-huawei-for-alleged-theft-of-trade-secrets-11547670341

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