Huawei Criminal Charges Cast Pall Over US-China Trade Talks

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As expected, the United States Justice Department has filed a slew of criminal charges against Chinese telecoms giant Huawei and its chief financial officer Meng Wanzhou.

"The US files a request to the Canadian side for the extradition of Ms. Meng Wanzhou, the Chinese Embassy in Canada firmly opposes and strongly protests over such kind of action", according to a statement issued by the spokesperson of China's Embassy in Canada on its website. Now the Department of Justice has indicted Huawei on charges including allegations the company stole technology from an American competitor, and violated trade sanctions against Iran.

The arrest of Meng, the daughter of Huawei's founder at Vancouver's airport, has led to the worst relations between Canada and China since the Tiananmen Square massacre in 1989. When questioned about it, Meng is believed to have misled United States banks into believing that her company had no interest in the Skycom-Iran deal.

Through her lawyer David Martin, Meng requested two changes to her bail: a change of date for her next scheduled court appearance and a change in surety.

The Canadian Minister of Justice has 30 days from the receipt of the extradition order to decide if Meng will face extradition proceedings.

In a sworn affidavit, Meng said she is innocent and will contest the allegations at trial in the United States if she is extradited.

According to acting US Attorney General Matthew Whitaker, the Justice Department has unsealed two indictments - one in NY and one in Washington state - with a total of 23 charges against Huawei, its subsidiaries and Meng for conspiring to steal trade secrets and violating sanctions.

US charges Huawei CFO over sanctions violations
US Acting Attorney General Matthew Whitaker at the announcement of criminal charges against Huawei

Documents filed in a NY federal district court allege that Meng and Skycom, which is registered in Hong Kong but operates in Iran, handled millions of dollars in deals and orders with the Iranians in violation of these sanctions.

The charges unsealed Monday accused Huawei of trying to take a piece of a robot and steal other technology from a T-Mobile lab that was used to test smartphones.

She says she is innocent, while China claims the charges are the product of political manipulation to hinder the Chinese business. Canada's government agreed to her request concerning bail at Tuesday's hearing, which the judge granted.

The indictment also claims that after T-Mobile discovered and interrupted these activities and then sued in 2014, Huawei produced a report falsely claiming that the theft was the work of rogue actors within the company and not a concerted effort by Huawei.

The indictment also targets charging Huawei and its top officials by conspiring to obstruct legal and justice processes.

In references to the Huawei case, China Daily, however, observed that it "remains to be seen if USA and China can maneuver their way to such an outcome".

When Huawei learned of the US criminal inquiry, one indictment notes, "Huawei and Huawei USA made efforts to move witnesses with knowledge ... to the PRC [People's Republic of China] and beyond the jurisdiction of the US government, and to destroy and hide evidence".

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