Huawei hit with new US charges of trade secrets theft

News February 14, 2020 No Comments

Huawei hit with new US charges of trade secrets theft

WASHINGTON: Huawei was hit on Thursday (Feb 13) with new US criminal charges alleging the Chinese tech giant engaged in a “decades-long” effort to steal trade secrets from American companies.

A US indictment unsealed in New York alleges Huawei and its proxies conspired “to misappropriate intellectual property” from six US firms as part of a strategy to grow and become the world’s largest telecom equipment maker, the Justice Department said.

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The new charges including a federal racketeering allegation add to an indictment unsealed in January 2019 that alleged Huawei stole trade secrets from US carrier T-Mobile.

READ: Is Huawei dangerous because it’s Chinese? What about Facebook?

The indictment names Huawei and several subsidiaries, as well as the company’s chief financial officer Meng Wanzhou, who has been arrested in Canada over a related probe into Huawei’s violations of US sanctions.

READ: Charges against Huawei executive are ‘fiction’, says defence at start of extradition hearing

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Huawei, one of the largest tech firms and a major telecom equipment maker, has been blacklisted by Washington amid concerns over its ties to the Chinese government and intelligence services.

The sanctions are aimed at blocking Huawei from getting any US telecom equipment contracts and prevent the transfer of American technology to the Chinese firm.

READ: Opposition to Huawei 5G in Canada waning: Poll

The company did not immediately respond to an AFP inquiry. It has previously strongly denied any use of “backdoors” for Chinese intelligence.

‘LONG-RUNNING DECEPTION’

The new 16-count indictment says Huawei used a “long-running practice of using fraud and deception to misappropriate sophisticated technology from US counterparts,” a Justice Department statement said, without naming the American companies.

“Huawei’s efforts to steal trade secrets and other sophisticated US technology were successful,” according to the statement, which said the company “obtained nonpublic intellectual property relating to internet router source code, cellular antenna technology and robotics” to gain an “unfair competitive advantage” over rivals.

According to the indictment, Huawei entered into confidentiality agreements with US tech firms and then violated those deals.

Huawei is accused of recruiting employees of other companies and “directing them to misappropriate their former employers’ intellectual property.”

The indictment also claims Huawei used “proxies” such as professors working at research institutions to steal trade secrets and “launched a policy instituting a bonus programme to reward employees who obtained confidential information from competitors.”

The fresh charges come amid heightened US-China trade tensions and efforts by Washington to keep Huawei from obtaining contracts for 5G, or fifth-generation wireless networks.

According to the 56-page indictment, Huawei used its subsidiaries around the world to conceal its deal with Iran and North Korea, which are subject to US sanctions.

Meng, arrested in late 2018, is under house arrest in Canada pending a ruling on whether she will be extradited to face charges in the United States.

The earlier charges against Meng allege she lied to the HSBC bank about Huawei’s relationship with its Iran-based affiliate Skycom, putting the bank at risk of violating US sanctions against Tehran.

Senators Richard Burr and Mark Warner, members of the Senate Intelligence Committee, welcomed news of the indictment.

“The indictment paints a damning portrait of an illegitimate organization that lacks any regard for the law,” the lawmakers said in a joint statement.

“Intellectual property theft, corporate sabotage, and market manipulation are part of Huawei’s core ethos and reflected in every aspect of how it conducts business. It uses these tactics indiscriminately against competitors and collaborators alike.”

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