FBI Director Christopher Wray’s Remarks Regarding Indictments of Huawei and Wanzhou Meng

Christopher Wray

Good afternoon. 

The charges unsealed today are the result of years of investigative work conducted by the FBI and our law enforcement partners. 

Both sets of charges expose Huawei’s brazen and persistent actions to exploit American companies and financial institutions, and to threaten the free and fair global marketplace.
As you can tell from the number and magnitude of charges, Huawei and its senior executives repeatedly refused to respect the laws of the United States and standard international business practices. 

Huawei also intentionally and systematically sought to steal valuable intellectual property from an American company so it could circumvent hard-earned, time-consuming research and gain an unfair market advantage.
In pursuit of their commercial ambitions, Huawei relied on dishonest business practices that contradict the economic principles that have allowed American companies and the United States to thrive. 

There is no place for this criminal behavior in our country or any other committed to the rule of law.

FBI Director Christopher Wray, standing with Commerce Secretary Wilbur Ross (left) and Acting Attorney General Matthew Whitaker, remarks on the charges against Huawei during a press conference today at the Department of Justice in Washington, D.C.
The prosperity that drives our economic security is inherently linked to our national security. 

And the immense influence that the Chinese government holds over Chinese corporations like Huawei represents a threat to both.
As Americans, we should all be concerned by the potential for any company beholden to a foreign government—especially one that doesn’t share our values—to burrow into the American telecommunications market. 

That kind of access could give a foreign government the capacity to maliciously modify or steal information, conduct undetected espionage, or exert pressure or control.
These cases make clear that, as a country, we must consider carefully the risk that companies like Huawei pose if we allow them into our telecommunications infrastructure.
Today’s charges serve as a warning that the FBI does not—and will not—tolerate businesses that violate our laws, obstruct our justice, and jeopardize our national security. 

We will not stand idly by while any entity—be it a foreign power or corporation—seeks to criminally or unfairly undermine our country’s place in the world.
This announcement would not have been possible without the dedication and hard work of FBI personnel in our Counterintelligence and Criminal Investigative Divisions, and in our New York, Dallas, and Seattle Field Offices. 

I’m proud of their hard work rooting out pervasive criminal behavior by Huawei and its executives.
I’d also like to thank our law enforcement partners in Canada for their continued and invaluable assistance to the United States on law enforcement matters such as this.
And lastly, I want to extend our gratitude to our partners at the Departments of Commerce and Homeland Security for their support in our broader efforts to defend our economic and national security. Thank you.

Huawei and China Have Limited Ways to Answer U.S. Charges

By Paul Mozur and Raymond Zhong

Wilbur Ross, the United States secretary of commerce, speaking on Monday about charges of bank fraud and stealing trade secrets against Huawei of China.

SHANGHAI — Ever since Meng Wanzhou, the chief financial officer at the Chinese technology giant Huawei, was arrested in Canada nearly two months ago, Chinese officials have denounced the move as “wrongful” and “arbitrary” — a political affair cloaked in a judicial one.
Now that the United States has laid out its case against Meng in greater detail, neither Huawei nor the Chinese government has easy options for responding or retaliating.
Huawei, the world’s largest provider of the equipment that powers mobile phone and data networks, said on Tuesday that it was innocent of charges unveiled in Washington the day before that it had misled the United States government about its business in Iran, obstructed a criminal investigation and stolen American industrial secrets.
China’s Foreign Ministry called, once again, for the United States and Canada to release Meng, who is a daughter of Huawei’s founder and chief executive, Ren Zhengfei.
But should Meng be brought from Canada to the United States to face charges, as American officials say they plan to request before a deadline on Wednesday, Beijing will have few ways to force Washington’s hand.
China is in the middle of a trade war that it is anxious to end as its vast economy slows. 

Any effort to get tough on the United States — such as by detaining American nationals, as it did to Canadians after Meng was arrested — could scuttle the negotiations. 

Those talks are set to resume on Wednesday.
And Huawei’s Washington operations have undergone drastic turnover as it appears to rein in its sales ambitions in America and shift tactics in its relations with the government. 

In the second shake-up of its American leadership in less than a year, the company is replacing Regent Zhang, its head of government affairs in Washington, with Joy Tan, currently its head of global communications.
The broad language of the Justice Department’s indictments suggests that other Huawei leaders, including Ren, a former officer in the People’s Liberation Army, might wish to exercise caution while traveling to countries that have an extradition treaty with the United States.
“If I was his lawyer, I would advise him to be careful,” said Julian Ku, a professor of law at Hofstra University.

Meng Wanzhou, Huawei’s chief financial officer, in Vancouver, British Columbia, in December. China and Huawei alike have few easy options if she is extradited to the United States.

But that kind of caution could make it more difficult still for Huawei to hold on to its business in places like Europe. 

Already, the United States has been applying pressure on all sides against Huawei, fearing that the Chinese government could use the company’s gear to sabotage other countries’ communication networks.
Previously, Canadian officials had said that Meng was accused of tricking financial institutions into making transactions that violated United States sanctions on Iran. 

One of the two indictments unsealed on Monday outlines a broader effort.
The indictment says that Huawei’s misrepresentations to the United States government and four multinational financial institutions began in 2007. 

It cites an interview between agents of the Federal Bureau of Investigation and Ren around July of that year, in which Ren said that his company complied with all American laws and that it had not dealt directly with any Iranian company.
The indictment also cites 2012 testimony before the United States Congress in which a Huawei executive said that the company’s business in Iran had not violated sanctions. 

That executive was Charles Ding, a corporate senior vice president. 

Ding, who was not mentioned by name in Monday’s indictment, couldn’t be reached for comment.
Also in the indictment is a reference to a file found on an electronic device that Meng was carrying when she arrived at New York’s John F. Kennedy International Airport in 2014. 

Officials detained her for a couple of hours when she arrived, according to a person with knowledge of the events. 

During that time, they briefly confiscated her electronic devices, said the person, who asked for anonymity because the events haven’t made public.
The file she was carrying, which the indictment said may have been deleted before being discovered, contained “suggested talking points” about Huawei’s relationship with Skycom, the company that prosecutors accuse Huawei of using as an unofficial subsidiary to obtain American-sourced goods, technology and services for its Iranian business.
The indictment also said that Skycom employed at least one United States citizen in Iran, a violation of American law. 

And it said that after Huawei found out that the United States was pursuing a criminal investigation in 2017, the company destroyed evidence and tried to move unspecified witnesses who knew about its Iranian business to China, beyond the reach of the American government.
The other indictment, which concerns the theft of trade secrets from the American wireless provider T-Mobile, refers to internal emails describing a plot to steal testing equipment from T-Mobile’s lab in Bellevue, Wash.
Huawei has contended that its employees were acting on their own to learn more about a robot that T-Mobile used to test smartphones, nicknamed Tappy because it could rapidly tap a phone screen. 

But the indictment cites multiple emails exchanged between Huawei engineers urging those with access to Tappy to take increasingly precise measurements.
Eventually, the indictment says, a Huawei engineer was sneaked into the Tappy laboratory by other Huawei employees who had access. 

He was caught and thrown out but returned, the indictment said.

Ren Zhengfei, the founder and chief executive of Huawei, is Meng’s father.

Later, after all but one Huawei employee had their access to the robot revoked, the employee took a Tappy robotic arm home for closer study, according to the indictment. 

A Huawei investigation into the issue, which concluded there was minimal coordination among the engineers, contained false statements, the indictment said.
The indictment also cites a Huawei program started in 2013 to reward employees for stealing confidential information from competitors. 

They were directed to post such information to an internal Huawei website, or in special cases to an encrypted email address, the indictment said. 

Bonuses were apportioned to those who stole the most valuable information, it said.
The evidence presented in this week’s indictments bolsters the American case for extraditing Meng, said Mr. Ku of Hofstra University.
“The standard for extradition is whether a Canadian court would send her to trial,” Mr. Ku said. “Essentially, is there enough evidence to indict someone? I think this will help meet that standard.”
Prosecutors redacted the identity of at least one of the defendants, most likely to leave open the option of arresting that person. 

That person isn’t likely to be Ren, said Mr. Ku, because he is mentioned later in the indictment. 

But that doesn’t guarantee prosectors won’t target him later.
Huawei has worked for a reset in Washington as relations with the American government have worsened. 

Last year it cut staff in Washington after investigations into the company deepened and AT&T walked away from a deal to sell Huawei’s phones. 

Further personnel shifts in recent weeks appear to be focused on improving its image in America.
Tan, Huawei’s incoming head of government affairs in Washington, has for years played a key role in the company’s media relations. 

She will be tasked with engaging an American administration that has grown hawkish on China. 

Her predecessor in Washington, Zhang, had previously been responsible for sales in Mexico.
The mounting global skepticism toward Huawei and other Chinese tech suppliers is starting to have practical effects on the telecommunications industry.
On Tuesday, TPG Telecom, an internet provider in Australia, said it has been forced to cancel the construction of its mobile network because of the Australian government’s decision last year to forbid Huawei from supplying 5G equipment.
In a stock-exchange filing, TPG said that it had already spent around $70 million on its new network, largely on Huawei gear. 

But the company said that it did not make sense to invest further in a network that could not later be upgraded to 5G.

Huawei Theft Saga

US in advanced stages of inquiry over Huawei theft of trade secrets
By Lily Kuo and agencies

Chinese thieves: Xi Jinping, is shown around Huawei’s London offices by the company’s boss, Ren Zhengfei. 

China has accused the US of trying to suppress its tech companies, as US prosecutors investigate allegations that Huawei stole trade secrets from US businesses.
Adding to pressure on the Chinese telecoms firm, US lawmakers have proposed a ban on selling US chips or components to the company.

According to the Wall Street Journal, which cited anonymous sources, the US Department of Justice (DoJ) is in the advanced stages of a criminal inquiry that could result in an indictment of Huawei.
The newspaper said the DoJ was looking into allegations of theft of trade secrets from Huawei’s US business partners, including a T-Mobile robotic device used to test smartphones.
Huawei and the DoJ declined to comment directly on the report.

The move would further escalate tensions between the US and China after the arrest last year in Canada of Huawei’s chief financial officer, Meng Wanzhou, the daughter of the company’s founder.
The case of Meng, under house arrest awaiting proceedings, has inflamed US-China and Canada-China relations.
Two Canadians have been detained in China since Meng’s arrest and a third has been sentenced to death on drug trafficking charges – moves observers have seen as attempts by Beijing to pressure Ottawa over her case.
China’s vice-premier and economic czar, Liu He, will be traveling to the US on 30 and 31 January for the next round of trade talks between the two countries, the ministry of commerce has said.
Huawei, the second-largest global smartphone maker and biggest producer of telecommunications equipment, has for years been under scrutiny in the US over purported links to the Chinese government.
Huawei’s reclusive founder Ren Zhengfei, in a rare media interview on Tuesday, forcefully denied accusations that his firm engaged in espionage on behalf of the Chinese government.
The tensions came against a backdrop of Donald Trump’s efforts to get more manufacturing on US soil and apply hefty tariffs on Chinese goods for what the US president has claimed are unfair trade practices by Beijing.
In a related move, US politicians introduced a bill to ban the export of American parts and components to Chinese telecoms companies that were in violation of US export control or sanctions laws – with Huawei and ZTE the likely targets.

China's ZTE is first major casualty of trade war with US

The Republican senator Tom Cotton, one of the bill’s sponsors, said: “Huawei is effectively an intelligence-gathering arm of the Chinese Communist party whose founder and CEO was an engineer for the People’s Liberation Army.”
The Democratic senator Chris Van Hollen said in the same statement: “Huawei and ZTE are two sides of the same coin. Both companies have repeatedly violated US laws, represent a significant risk to American national security interests and need to be held accountable.”
Last year Trump reached a deal with ZTE that eased tough financial penalties on the firm for helping Iran and North Korea evade American sanctions. 

Trump said his decision in May to spare ZTE came following an appeal by Xi Jinping to help save Chinese jobs.