Rogue Company: Huawei Sinks Deeper As The World Turns Its Back

Governments worldwide have started to view Huawei's expansion as a serious threat
By David Volodzko

In this Jan. 9, 2019, photo, a security guard stands near the Huawei company logo during a new product launching event in Beijing. The Chinese Foreign Ministry said late Friday, Jan. 11, 2019, it is "closely following the detention of Huawei employee Wang Weijing" on charges of spying for China.

Huawei Technologies now faces shocking new charges, in addition to a growing litany of scandals, suggesting the world's second-largest smartphone maker is working with the Chinese military to steal our technology, defraud our institutions and spy on us using our own devices.
The company, its chief financial officer Meng Wanzhou and subsidiaries Skycom Tech and Huawei Device USA now face criminal charges for bank fraud, wire fraud, violating U.S. sanctions against Iran and conspiring to obstruct justice. 

Governments worldwide have started to view its expansion as a serious threat.
"It's been a longstanding concern of the U.S. intelligence community," former Director of National Intelligence James Clapper said, "that any of the Chinese IT and telecommunications companies like Huawei, like ZTE, for example, have to be considered as extensions of Chinese intelligence service — in fact, Chinese law encourages, if not mandates, that when called upon, these companies will cooperate with the Chinese government."
The latest charges claim Meng delivered a presentation to a bank executive in 2013, during which she repeatedly lied about Huawei's relationship with Skycom, which tried to sell U.S. technology to Iran despite sanctions. 

Then in 2017, when Huawei became aware of the U.S. investigation, Huawei Device USA tried to obstruct justice by attempting to move witnesses who knew about its operations in Iran back to China, where FBI agents couldn't interview them.
On December 1, Canadian officials arrested Meng for extradition to the United States. 

But Meng is the daughter of Ren Zhengfei, who formerly worked as a technology engineer for the Chinese military before founding Huawei, which makes her Chinese corporate royalty — and Chinese officials made no attempt to mask their outrage.
Days later, Chinese Vice Foreign Minister Le Yucheng summoned Canadian Ambassador to China John McCallum to protest Meng's arrest, calling it "vile in nature" and threatening Canada with "grave consequences."
China then arrested consultant Michael Spavor and former diplomat Michael Kovrig, both Canadian nationals, on charges of endangering state security. 

This past weekend, another Canadian national was arrested on fraud charges.
The pressure was enough to force some Canadian officials to openly question the government's move. “From Canada’s point of view," McCallum said at a charity lunch in Vancouver, "if [the U.S.] drops the extradition request, that would be great for Canada."
McCallum, an outspoken critic of his government's decision to arrest Meng, has previously said she has “strong arguments” to fight extradition. 

Canadian Prime Minister Justin Trudeau fired him after these recent remarks.
Meng remains detained in Vancouver, but the fraud allegations involving her are only part of Huawei's problems. 

The U.S. Justice Department has separately accused two Huawei affiliates of stealing trade secrets, wire fraud and obstruction of justice over violating agreements with T-Mobile in 2012 by secretly taking photos of its Tappy robot technology, which mimics human fingers to test smartphones, and stealing a piece so Huawei engineers could reverse engineer it.
North America isn't the only place turning its back on the company, either. 

Earlier this month, the Huawei sales director for Poland was arrested for espionage.
Australia's TPG Telecom has abandoned plans to build a new mobile telephone network that would have relied on Huawei technology. 

French European Affairs Minister Nathalie Loiseau said last week European states must stand united when dealing with Huawei.
And Vodafone has announced it is halting the purchase of Huawei technology for its new 5G networks in Europe.
But some are wondering why this awakening didn't take place sooner, since Huawei has for years been mired in scandal. 

In July 2012, vulnerabilities were found in its routers that could allow remote access to the devices. In early 2015, German cybersecurity company G Data reported it had found malware pre-installed on Lenovo, Xiaomi and Huawei smartphones enabling audio surveillance and location tracking. 

In January 2018, African Union officials accused China of hacking the computer system at its headquarters every night for the past five years. 

The building, located in Addis Ababa, Ethiopia, had been built by Chinese contractors — including Huawei.
Then there's a slew of accusations, such as that Huawei has provided surveillance equipment to the Taliban. 

Or the case of Shane Todd, the American engineer who apparently committed "suicide" in Singapore in June 2012 under suspicious circumstances, in connection with work he had been doing involving a semiconductor amplifying device purportedly for Huawei, with potential military applications.
Todd had evidently told his family the project could endanger U.S. national security, and that he felt he was in danger.
China continues to respond with denial and threats. 

Rogue Nation, Rogue Company

Huawei and Meng Wanzhou Face Criminal Charges
By David E. Sanger, Katie Benner and Matthew Goldstein

The Justice Department unveiled charges against Meng Wanzhou, the chief financial officer of Huawei, for helping evade American sanctions on Iran.

WASHINGTON — The Justice Department unveiled sweeping charges on Monday against the Chinese telecom firm Huawei and its chief financial officer, Meng Wanzhou, outlining a decade-long attempt by the company to steal trade secrets, obstruct a criminal investigation and evade economic sanctions on Iran.
The pair of indictments, which were partly unsealed on Monday, come amid a broad campaign by the United States to thwart China’s biggest telecom equipment maker.
Officials have long suspected Huawei of working to advance Beijing’s global ambitions and undermine America’s interests and have begun taking steps to curb its international presence.
The charges underscore Washington’s determination to prove that Huawei poses a national security threat and to convince other nations that it cannot be trusted to build their next generation of wireless networks, known as 5G. 
The indictments, based in part on the company’s internal emails, describe a plot to steal testing equipment from T-Mobile laboratories in Bellevue, Wash.
They also cite internal memos, obtained from Meng, that link her to an elaborate bank fraud that helped Huawei profit by evading Iran sanctions.
The acting attorney general, Matthew G. Whitaker, flanked by the heads of several other cabinet agencies, said the United States would seek to have Meng extradited from Canada, where she was detained last year at the request of the United States.
The charges outlined Monday come at a sensitive diplomatic moment, as top officials from China are expected to arrive in Washington this week for two days of talks aimed at resolving a months long trade war between the world’s two largest economies.
Trump administration officials have insisted that Meng’s detention will not affect the trade talks, but the timing of the indictment coming so close to in-person discussions is likely to further strain relations between the two countries.
Meng is the daughter of Huawei’s founder and one of the most powerful industrialists in the country. Her arrest has outraged the Chinese government, which has since arrested two Canadians in retaliation.
The indictment now presents Canada with a politically charged decision: whether to extradite Meng to face the fraud charges, or make a political determination to send her back to Beijing.
A spokesman for Huawei, Joe Kelly, said it “is not aware of any wrongdoing by Meng, and believes the U.S. courts will ultimately reach the same conclusion.”
The indictment unsealed against Meng is similar to the charges leveled against the Huawei executive in filings made by federal prosecutors in connection with the bail hearing in Canada.
It claimed that Huawei defrauded four large banks into clearing transactions with Iran in violation of international sanctions through a subsidiary called Skycom.
Federal authorities did not identify the banks, but in an earlier court proceeding in Canada after Meng’s arrest, prosecutors had identified one of the banks as HSBC.
The most serious new allegation in the indictment, which could have bearing on the extradition proceeding in Canada, is the contention by federal prosecutors that Huawei sought to impede the investigation into the telecom company’s attempt to evade economic sanctions on Iran by destroying or concealing evidence.
Huawei moved employees out of the United States so they could not be called as witnesses before a grand jury in Brooklyn. 
The company destroyed evidence in order to hinder the inquiry.
Richard P. Donoghue, the United States attorney for the Eastern District of New York, said that the telecom firm’s actions began in 2007 and “allowed Iran to evade sanctions imposed by the United States and to allow Huawei to profit.”
The arrest of a top executive for sanctions evasion is unusual.
In 2015, Deutsche Bank was fined $258 million for violating American sanctions on Iran and Syria. No executives involved in the scheme were indicted, though six employees were fired.
Meng is under house arrest at one of two residences that she owns in Vancouver.
American officials said Monday that they will request her extradition before a deadline on Wednesday. 
The next stage of her case will be decided at the Supreme Court of British Columbia.
“Companies like Huawei pose a dual threat to both our economic and national security,” said Christopher A. Wray, the F.B.I. director, who joined Mr. Whitaker and two other cabinet members, Wilbur Ross, the commerce secretary, and Kirstjen Nielsen, the homeland security secretary.
Mr. Wray argued that “the magnitude of these charges make clear just how seriously the F.B.I. takes this threat.”
“Today should serve as a warning that we will not tolerate businesses that violate our laws, obstruct justice or jeopardize national and economic well-being,” he added.
Parts of the indictment were redacted and left open the question of whether the United States had secretly indicted Meng’s father, Ren Zhengfei, a former People’s Liberation Army officer and member of the Communist Party.
A United States government interview with Ren from 2007 is cited in one of the indictments, to make the case that he misled investigators, and the name of at least one of those indicted is blacked out from the publicly filed version of the indictment.
Mr. Whitaker fueled the speculation about an indictment of Ren when he told reporters on Monday that the criminal activity “goes all the way to the top of the company.”
The Justice Department also accused Huawei of conspiring to steal trade secrets from a competitor, T-Mobile.
The charges relate to a criminal investigation that stemmed from a 2014 civil suit between the two companies.
In that case, T-Mobile accused Huawei of stealing proprietary robotics technology that the telecom company used to diagnose quality-control issues in cellphones.
Huawei was found guilty in May 2017.
The indictment cited internal emails from Huawei and its American subsidiary that set up a bonus system for employees who could illicitly obtain the T-Mobile testing system.
“These are very serious actions by a company that appears to be using corporate espionage not only to enhance their bottom line but to compete in the world economy,” Mr. Whitaker said.
The legal drama now shifts to Canada, where the government has warned that it will not extradite Meng if it appears that the request is being made for political reasons.
Trump said after her arrest that he would consider using her case for leverage in the upcoming trade negotiations, which fueled speculation that the United States may be more interested in Meng’s value in winning trade concessions than in obtaining a conviction.
Canada’s ambassador to Beijing was fired over the weekend by Prime Minister Justin Trudeau for suggesting that the case against Meng was political and that Canada might accede to Chinese demands and return her home.
Mr. Whitaker declined to say Monday whether the White House would interfere in the criminal case against Meng.
But the array of officials present at the announcement was clearly intended to demonstrate a coordinated government effort to go after Huawei.
“Given the seriousness of these charges, and the direct involvement of cabinet officials in their rollout, today’s announcements underscore that there is a unified full-court press by the administration to hold China accountable for the theft of proprietary U.S. technology and violations of U.S. export control and sanctions laws,” said David Laufman, the former chief of the Justice Department’s counterintelligence and export control section.
The indictments could further complicate the trade talks that the administration is holding this week with Beijing.
The Trump administration is seeking significant changes to China’s trade practices, including what it says is a pattern of Beijing pressuring American companies to hand over valuable technology and outright theft of intellectual property.
“The Americans are not going to surrender global technological supremacy without a fight, and the indictment of Huawei is the opening shot in that struggle,” said Michael Pillsbury, a China scholar at the Hudson Institute who advises the Trump administration.
Lawmakers like Senator Mark Warner, Democrat of Virginia, who have long argued for action to be taken against Chinese technology providers including Huawei and ZTE, a smaller firm that has faced similar accusations, called the indictment “a reminder that we need to take seriously the risks of doing business with companies like Huawei and allowing them access to our markets.”
Mr. Warner said that he would continue to press Canada to reconsider using any Huawei technology as it upgrades its telecommunications network.
On Tuesday, American intelligence officials are expected to cite 5G investments by Chinese telecom companies, including Huawei, as a worldwide threat. 
And the United States has been drafting an executive order, expected in the coming weeks, that would effectively ban American companies from using Chinese-origin equipment in critical telecommunications networks.

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.

Justice Department Details Charges Against Chinese Huawei and Its CFO

By MICHAEL BALSAMO 

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.

WASHINGTON — The Justice Department unsealed criminal charges Monday against Chinese tech giant Huawei, two of its subsidiaries and a top executive, who are accused of misleading banks about the company’s business and violating U.S. sanctions.
The company is also charged in a separate case with stealing trade secrets from T-Mobile, according to federal prosecutors.
Prosecutors are seeking to extradite the company’s chief financial officer, Meng Wanzhou, and allege she committed fraud by misleading banks about Huawei’s business dealings in Iran.

She was arrested on Dec. 1 in Canada.
The criminal charges in Brooklyn and Seattle come as trade talks between China and the U.S. are scheduled for this week.
“As I told high-level Chinese law enforcement officials in August we need more law enforcement cooperation with China,” acting Attorney General Matt Whitaker said at a news conference with other Cabinet officials, including Commerce Secretary Wilbur Ross and Homeland Security Secretary Kirstjen Nielsen. 

“China should be concerned about criminal activities by Chinese companies and China should take action.”
U.S. prosecutors charge that Huawei used a Hong Kong shell company to sell equipment in Iran in violation of U.S. sanctions. 

Huawei had done business in Iran through a Hong Kong company called Skycom and Meng misled U.S. banks into believing the two companies were separate, according to the Justice Department.
The announcement Monday includes a 10-count grand jury indictment in Seattle, and a separate 13-count case from prosecutors in the Eastern District of New York.
“As you can tell from the number and magnitude of the charges, Huawei and its senior executives repeatedly refused to respect U.S. law and standard international business practices,” said FBI Director Chris Wray.
A Huawei spokesman did not immediately return phone messages seeking comment.
Huawei is the world’s biggest supplier of network gear used by phone and internet companies and has long been a front for spying by the Chinese military and security services.
Prosecutors also allege that Huawei stole trade secrets, including the technology behind a robotic device that T-Mobile used to test smartphones, prosecutors said. 

A jury in Seattle ruled that Huawei had misappropriated the robotic technology from T-Mobile’s lab in Washington state.
Meng was arrested in Canada because the U.S. and China don’t have an extradition treaty. 

But new rules enacted in the past few years have made it easier for U.S. prosecutors to indict overseas corporate defendants without coordinating with foreign governments, said Ronald Cheng, a partner with the O’Melveny and Myers law office in Los Angeles and former U.S. judicial attache in Beijing.
Because it’s usually difficult to go after corporate officers, Chinese companies accused of IP theft need to worry more about asset forfeiture, which has in some cases been considerable. 

In July, the Chinese wind turbine maker Sinovel Wind Group LLC was ordered to pay more than $50 million in restitution after being convicted of stealing trade secrets from the U.S. company AMSC.
Cheng, who was reached in Hong Kong, said there’s considerable concern among Chinese business executives about stepped up enforcement in such cases, which began in earnest with the Obama administration, including a 2014 indictment alleging theft of solar power trade secrets.
“I think the government would say that this is part of a large pattern of conduct” by Chinese companies, Cheng said of Monday’s indictments.
The Huawei case has set off a diplomatic spat with the three nations, which has threatened to complicate ties between the U.S. and Canada. 

Donald Trump said he would get involved in the Huawei case if it would help produce a trade agreement with China and told Reuters in an interview in December that he would “intervene if I thought it was necessary.”
The arrest of Meng, the daughter of Huawei’s founder at Vancouver’s airport, has in particular led to the worst relations between Canada and China since the Tiananmen Square massacre in 1989. 

China detained two Canadians shortly after Meng’s arrest in an apparent attempt to pressure Canada to release her. 

A Chinese court also sentenced a third Canadian to death in a sudden retrial of a drug case, overturning a 15-year prison term handed down earlier.
David Martin, Meng’s lawyer in Canada, didn’t immediately respond to a message seeking comment. 

Meng is out on bail in Vancouver and is due back in court Feb. 6 as she awaits extradition proceedings to begin.
Canada arrested Meng at the request of the United States. 

The Chinese have been furious at Canada ever since and arrested Canadian ex-diplomat Michael Kovrig and businessman Michael Spavor on Dec. 10 on vague allegations of endangering national security.

Criminal Company

US unveils criminal charges against Huawei and Meng Wanzhou 
By Kiran Stacey in Washington and Tom Mitchell in Beijing

Acting US Attorney General Matthew Whitaker reiterated the Justice Department’s desire to have Huawei CFO Meng Wanzhou extradited to the United States.

The US has accused China’s Huawei and its chief financial officer of stealing American technology and breaking US sanctions against Iran, in a criminal indictment that sharply escalates the two countries’ technological rivalry.
 The move will overshadow trade talks this week aimed at averting an all-out trade war between the world’s two largest economies.
 Matthew Whitaker, acting attorney-general, announced the action against the world’s biggest telecoms equipment maker on Monday as China’s trade negotiators, led by Vice-Premier Liu He, arrived in Washington for talks scheduled to open on Wednesday.
 Depending on the penalties sought by the justice department, the Trump administration’s salvo could disrupt the global operations of a Chinese corporate champion and land its chief financial officer, Meng Wanzhou, in prison.
 Meng is the daughter of Huawei’s founder, Ren Zhengfei, and is currently in Vancouver as she fights a US extradition request in Canadian courts.
Canada’s justice department late Monday said it had received a formal extradition request from the US, the Canadian Broadcasting Corporation reported.
 Mr Whitaker told a press conference: “These are very serious actions by a company that appears to be using corporate espionage and sanctions violations not only to enhance their bottom line, but also to compete in the world economy. This is something the United States will not stand for.”
 He added: “This goes back 10 years and goes all the way to the top of the company.” 
 Huawei said it was “disappointed to learn of the charges brought against the company today”, adding that it had sought discussions with the US justice department after Meng’s arrest but “the request was rejected”.
 US officials said the investigations into Huawei had been going on for years.
But they began to come to a head in December, when Canadian officials arrested Meng in Vancouver on US charges, a move that triggered protests from China, which has since detained at least two Canadian citizens.
 Mr Whitaker said the US would formally lodge an extradition request with Canada in the coming days. 
 Meng’s arrest is a particularly sensitive political issue given Huawei’s status as a Chinese national champion.
 Eswar Prasad, a professor of trade policy at Cornell University, predicted the charges would make an eventual trade deal less likely.
 It is also likely to give the US further leverage when urging allies to do more to shut the Chinese company out of their markets. 
 Mark Warner, the Democratic vice-chairman of the Senate intelligence committee, said: “This is a reminder that we need to take seriously the risks of doing business with companies like Huawei and allowing them access to our markets. I will continue to strongly urge our ally Canada to reconsider Huawei’s inclusion in any aspect of its 5G infrastructure.” 
 US officials including Wilbur Ross, the commerce secretary, outlined on Monday the charges being brought against both Meng and the company.
 The charges of corporate espionage, they said, related to Huawei’s attempts to steal the technology used by T-Mobile, one of its US business partners, in a robot called Tappy, which was used to test mobile telephones.
 Annette Hayes, first assistant US attorney for the western district of Washington state, said US officials had internal emails from Huawei showing this was a “determined and unrelenting effort”, and not a rogue operation by some within the company.
“This was Huawei’s modus operandi,” she said.
 T-Mobile declined to comment.
The sanctions-busting charges relate to Huawei’s ownership of a company called Skycom, which was reported to have offered to sell embargoed Hewlett-Packard equipment to Iran’s Mobile Telecommunication Co in 2013.
The indictment filed in the eastern district of New York alleges that Skycom illegally employed a US citizen in Iran, and that Huawei lied to US banks about its financial interest in Skycom.
As a result, the indictment says, US funds were illegally funnelled to Iran. 
 US officials said they had evidence that Meng was personally involved in these criminal actions. 
 The legal action might have additional consequences for the company as a whole.
 One lawyer involved in action against Huawei in the US said: “The fact that Wilbur Ross was at the press conference indicates the US might end up putting Huawei on the export control list.”
 Banning US companies from exporting to Huawei is seen in Washington as the “nuclear option” against the Chinese company, given its reliance on US software and microchips.
 Stocks in China turned sharply lower following the filing of the charges and declines on Wall Street on Monday.
The Shenzhen Composite fell as much as 2.6 per cent by mid-morning, but later erased some of that decline to trade down 1 per cent in the late afternoon.

Rogue Company

U.S. Will Ask Canada to Extradite Huawei Executive

By Edward Wong, Katie Benner and Alan Rappeport

Meng Wanzhou, the chief financial officer of Huawei, arriving last month at a parole office in Vancouver. American officials are expected to ask Canada within a week to extradite Meng to the United States to face charges related to violating Iran sanctions.

WASHINGTON — The United States plans to formally request within a week that Canada extradite a top Huawei executive to stand trial for charges related to violating American sanctions on Iran.
American officials say they will seek to have Meng Wanzhou, the chief financial officer of the Chinese telecom firm Huawei who was detained in Canada on Dec. 1, sent to the United States. 

They have until Jan. 30 to make the request.
“We will continue to pursue the extradition of defendant Meng Wanzhou, and will meet all deadlines set by the U.S.-Canada Extradition Treaty,” Marc Raimondi, a Justice Department spokesman, said in a statement. 

“We greatly appreciate Canada’s continuing support in our mutual efforts to enforce the rule of law.”
The United States’ request would come as American and Chinese officials kick off a critical round of trade talks next week aimed at resolving a dispute that is causing great economic damage in China.

The talks are expected to begin Jan. 30 in Washington, when a delegation led by Liu He, China’s top trade negotiator, meets with Treasury Secretary Steven Mnuchin and Robert Lighthizer, the United States trade representative.
American and Chinese officials have tried to portray the arrest of Meng as separate from the trade talks, which are taking place against a March 2 deadline set by President Trump and Xi Jinping.
But the Trump administration has increasingly mixed talk of national security concerns related to Chinese businesses with its positions on trade. 

And American officials have tried to crack down on certain activities by Chinese telecom firms like Huawei, which is aiming to build next-generation cellular and data networks in countries worldwide.
China has already expressed alarm about the detention of Meng, a Chinese citizen and a daughter of the founder of Huawei, whose arrest set off a diplomatic crisis involving the United States, Canada and China. 

Meng is currently living with her family at one of her homes in Vancouver. 

In December, a Canadian court ruled that Meng would not have to be held in jail, but said that the authorities could closely monitor her, and that certain parts of Vancouver were off limits.
A senior official with Global Affairs, the Canadian Foreign Ministry, said the Canadian government expects the United States to proceed with the request to have her brought to the United States to face charges that she lied to American banks about Huawei’s efforts to evade Iran sanctions. 

Meng was arrested Dec. 1 in a Vancouver airport as she was stopping over between China and Latin America, and the treaty says the United States must make a formal extradition request within 60 days of an arrest.
Once Canada gets the request, the process would move to the Canadian courts, which would determine whether Meng could be extradited. 

If they say yes, the minister of justice makes the final determination. 

The Canadian official said the process could take months or years because the first decision by a court can be appealed to a higher court.
A spokesman for Canada’s Justice Department said Tuesday night that the British Columbia Supreme Court had scheduled a hearing for Feb. 6 to confirm that the United States had made a formal extradition request by the deadline.
The Chinese Ministry of Foreign Affairs indicated Tuesday that Meng’s fate would be taken into consideration as the trade talks proceed. 

While American officials insist that Meng’s case is not a consideration in the trade negotiations, Trump suggested in December that he could intervene in the matter if it would help close a trade deal.
Trump administration officials have increasingly cautioned that a resolution to the tit-for-tat trade war will be hard to reach.
“I acknowledge the degree of difficulty,” Larry Kudlow, the director of the White House National Economic Council, said on Tuesday, referring to the magnitude of the structural changes that the United States is demanding from China. 

“At the end of the day, it has to be in America’s interest.”
Members of the United States national security community say there is a risk that Meng’s fate becomes entangled with trade considerations.
“Given previous reporting, at any moment, the administration could decide that extracting a trade concession is more important to U.S. national interests than the prosecution of this individual,” said David Laufman, a Washington lawyer who served as chief of the Justice Department’s counterintelligence and export control section. 

Laufman declined to comment on the specifics of the case.
The arrest of Meng followed a yearslong investigation by Justice Department officials in Brooklyn looking at whether a company tied to Huawei did business in Iran in a way that violated sanctions, and whether Meng lied to American banks about Huawei’s connections to the smaller company, Skycom. 

Justice Department officials aim to charge Meng with fraud.
Chinese officials say the arrest of Meng was based on political motivations and are linked to a broader Trump administration campaign against Huawei.
The United States has been urging other countries to prevent Huawei from building their networks, citing security concerns that the company poses. 

American officials frequently point out that the founder of Huawei and Meng’s father, Ren Zhengfei, was a soldier decades ago in the People’s Liberation Army. 

Some American allies, foremost among them Australia, have voiced similar security warnings about Huawei.
Days after Meng’s arrest, Chinese security officers separately detained two Canadian men, Michael Kovrig and Michael Spavor, in northern China. 

Mr. Kovrig is a diplomat on leave and a researcher for the International Crisis Group, and Mr. Spavor is an entrepreneur who has organized tours to North Korea. 

Chinese officials have said security officers are investigating the men on potential national security charges. 

Canada has said the arrests were arbitrary, and analysts say it is clear the men were detained as hostages to trade for Meng.
On Monday, more than 100 academics and former diplomats issued an open letter calling on China to free the men immediately.
Last week, a Chinese court sentenced to death Robert Lloyd Schellenberg, a Canadian man convicted of drug smuggling, further raising tensions.
On Monday, The Globe and Mail, a newspaper in Toronto, published an article in which David MacNaughton, the Canadian ambassador to the United States, said American officials would proceed with the extradition request.
Chrystia Freeland, the foreign minister of Canada, has said repeatedly that Canadian courts would make decisions based purely on legal considerations and not on politics. 

Ms. Freeland stressed that approach after Trump told Reuters in an interview in December that he could stop the extradition of Meng if China offered sufficient concessions in continuing negotiations aimed at ending a costly trade war between the United States and China that has dragged on since Mr. Trump started it last summer.