The Chinese company Huawei, a telecommunication giant, was put in the spotlight as the United States showed concerns over the possibility of Chinese spying through the use of their technology. Concerns grew larger back in early December of 2018 when Meng Wanzhou, daughter of founder Ren Zhengfei and current CFO of Huawei, was arrested by Canadian authorities at the request of the U.S. government due to suspicion of intellectual property theft and bypassing U.S. sanctions in Iran. Meng’s arrest and extradition to the U.S. were met with negative reactions and fervent denial of any crimes by the Chinese government as well as Huawei.
A press conference held Monday, January 28th, 2019, stated that Huawei did indeed make “concerted effort,” as stated by acting Attorney General Matthew Whitaker, to steal information involving Tappy, a phone-testing robot by T-Mobile. Whitaker and FBI Director Christopher Wray were joined by Department of Homeland (DHS) Secretary Kirstjen Nielsen, Commerce Secretary Wilbur Ross, and several U.S. attorneys for the announcement at DOJ headquarters. It was mentioned that Huawei instructed its employees to take photos of Tappy, and at one point even steal pieces of it for possible replication. These type of actions clearly go against the non-disclosure and confidentiality agreements with T-Mobile. The Justice Department is also accusing the company of offering bonuses to any employee able to deliver such information.
Reporters were told by Wray that “The charges unsealed today clearly allege that Huawei intentionally conspired to steal the intellectual property of an American company in an attempt to undermine the free and fair global marketplace,”
Much of the U.S. government’s concerns of having intellectual property stolen are becoming justified, and so the DOJ, as well as the Trump administration, are gaining praise for holding Huawei and the Chinese government accountable for such infractions of the law.
There is also much talk about Huawei’s connection to the Chinese government and Communist Party. This situation has encouraged many questions about how close the business and political community of China are at this time. With the high possibility of spying and intellectual theft from a telecom company, it is hard to say that even those businesses on an international level are completely separated. Democratic Senator Mark Warner of Virginia even went so far as to state “There is ample evidence to suggest that no major Chinese company is independent of the Chinese government and Communist Party – and Huawei, which China’s government and military tout as a ‘national champion,’ is no exception. It has been clear for some time that Huawei poses a threat to our national security,”.
In addition to the denial, accused theft, and breach of confidentiality, the indictments also claim Huawei used a shell company named Skycom to do its business in Iran. A shell company is a business that was only created to hold fund and complete financial transactions and is generally just an inactive company used as a means of financial maneuvers. This would be a violation of the economic sanction imposed on Iran by the United States.
All of this information came to light as U.S. officials were scheduled to have a meeting with representatives of the Chinese government in order to broker a trade agreement that would end the prolonged tariff war between them. Furthermore, the U.S. and China are also contending for the right to control 5G infrastructures that could lead to a boost for either country’s economic and military success.
These criminal charges against Huawei unveiled by the Department of Justice accuses them of multiple infractions including stealing trade secrets, breaking confidentiality agreements, violating a sanction set by the U.S. in Iran, and wire fraud. While Meng’s Lawyer claims that she is simply a “pawn,” the evidence growing against Huawei, in this case, is becoming extensive. Huawei and the Chinese government are starting to have few options now that this information has come to light, and with negotiations over the future of the United States and China, relations are still very much in the dark.
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