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Beijing decries ‘political manipulations’ and Chinese tech giant denies accusations as US government steps up pressure.
The US Department of Justice has filed a series of criminal charges against Chinese tech giant Huawei, two of its subsidiaries and top executive Meng Wanzhou, who are accused of misleading banks about the company’s business and violating US sanctions against Iran.
The company is also charged in a separate indictment with stealing trade secrets from T-Mobile, US federal prosecutors said on Monday.
The two cases are likely to ratchet up tensions between the United States and China, which are already embroiled in a bitter trade war.
The US fully reimposed sanctions against Iran last year after President Donald Trump announced Washington’s withdrawal from a multinational nuclear deal, saying it was not firm enough to prevent Tehran from developing nuclear weapons.
Huawei, China respond
In a statement on Tuesday, Huawei denied the charges against it, adding that it had asked to discuss the investigation with US prosecutors following Meng’s arrest but that request was rejected.
The company said it is “not aware of any wrongdoing by Ms Meng, and believes the US courts will ultimately reach the same conclusion”.
Meng, Huawei’s chief financial officer and daughter of the company’s founder, has denied any wrongdoing.
Meanwhile, China’s foreign ministry decried the “political manipulations” behind the US government’s case against Huawei.
“For some time, the US has used state power to discredit and crack down on specific Chinese companies in an attempt to strangle the enterprises’ legitimate and legal operations,” the ministry said in a statement on Tuesday.
“There are strong political motivations and political manipulations behind the actions.”
Wen Ku, a senior information and communications officer at the Ministry of Industry and Information Technology, told a news conference in Beijing the US indictments were “unfair and immoral”.
Einar Tangen, a political analyst and investment banker who advises the Chinese government on economic and development issues, said within China the charges are seen as “a tactical ploy” by Trump amid the trade dispute between the world’s two largest economies.
“From Donald Trump’s point of view, it makes good tactics to try to put your opponent off. Unfortunately for him, China was kind of expecting this – they are still not happy about it but in the end this is just political theatre,” Tangen told Al Jazeera from Beijing, warning however that US move could cause a backlash in China itself.
“Huawei is massively popular, they have overtaken the crown as the number one provider of cellphones in China, and Chinese consumers might react to this by saying, ‘well, if they are going to attack our companies, we will stop buying American goods’.”
Prosecutors are seeking to extradite Meng, alleging she committed fraud by misleading banks about Huawei’s business dealings in Iran. She was arrested on December 1 in Canada and is currently out on bail.
The prosecutors accused Huawei of using a Hong Kong shell company to sell equipment in Iran in violation of US sanctions. Huawei had done business in Iran through a Hong Kong company called Skycom and alleged that Meng misled US banks into believing the two companies were separate, according to the Justice Department.
In addition to sanctions violations, the 13-count indictment unsealed in New York accused Huawei of money laundering, conspiracy to defraud the US and obstruction of justice.
According to the indictment, Huawei initially claimed that Skycom was not affiliated with it and later said it had only limited operations in Iran that did not violate US sanctions. But the indictment alleged the opposite was true.
It said Huawei’s claims that it sold its interest in Skycom to an unrelated third party in 2007 and that Skycom was merely Huawei’s local business partner in Iran were false.
In reality, Huawei orchestrated the sale to look like a transaction between two unrelated parties, but Huawei actually controlled the company that purchased Skycom, according to the indictment.
The Justice Department also cited news reports in 2013 that disclosed that Huawei operated Skycom as an unofficial affiliate in Iran and that Meng had served on its board of directors.
Even after those reports, Huawei employees, and in particular Meng, continued to lie to Huawei’s banking partners about the tech giant’s relationship with Skycom, the indictment said. The banks relied on the repeated misrepresentations by Huawei as they continued their relationships with the company, it added.
Technology theft charges
In a separate indictment unsealed in the northwestern US state of Washington, prosecutors also alleged that Huawei stole trade secrets, including the technology behind a robotic device that T-Mobile used to test smartphones.
A jury in Seattle ruled that Huawei had misappropriated the robotic technology from T-Mobile’s lab in Washington state.
Meng, who was arrested at in Vancouver on December 1 at Washington’s request, is expected to fight extradition to the US, amid heavy pressure on Canada from Beijing, whose subsequent detention of two Canadians is seen by observers as an act of retaliation for Meng’s arrest.
Acting US Attorney General Matthew Whitaker said the extradition request would be sent by a January 30 deadline.
A hearing is set for February 6.
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