US federal investigators have charged Chinese vendor Huawei with financial fraud for stealing intellectual property from T-Mobile and trying to sidestep US sanctions on Iran.
On Monday, the US Department of Justice announced 23 criminal charges against Huawei, claiming it conspired for years to violate US law.
The charges relate to bank fraud and an attempt to steal a smartphone-testing robot from T-Mobile, not state-sponsored espionage. But the suspected crimes underscore the danger of having Huawei sell its technology in the US, according to FBI Director Christopher Wray. "We have to carefully consider the risks if we are going to allow them into our telecommunication networks," he said in a press conference announcing the indictments.
Thirteen of the charges deal with Huawei's decade-long effort to secure funding from banks while covering up its business ownership in a company affiliate located in Iran—a violation of sanctions imposed on the country, US officials claim.
The 10 remaining charges deal with the Chinese company trying to steal a smartphone-testing machine from T-Mobile called "Tappy," which Huawei was seeking to replicate. US federal investigators claim to have obtained emails showing Huawei employees communicating about the conspiracy, which eventually led the staffers to steal a robot arm from a Tappy device
"Huawei and its senior executives repeatedly refused to respect US law and international business practices," Wray said in a press conference.
The Justice Department also said it plans on extraditing Huawei CFO Meng Wanzhou from Canada to the US for orchestrating the company's attempts to circumvent sanctions on Iran. Meng was arrested in Vancouver in December on charges of commiting bank and wire fraud.
US Commerce Secretary Wilbur Ross declined to comment on whether the Trump administration would ban Huawei from the US market. "We don't comment on pending investigations," he said at the press conference.
Nevertheless, the indictments are bad news for Huawei, which could face sanctions and a hefty fine. Last year, the Trump administration punished Chinese vendor ZTE for trying to dodge sanctions on Iran with a $1.4 billion penalty.
So far, Huawei hasn't responded to the allegations. But back in December, the company denied it had violated any sanctions in response to news that Huawei's CFO had been arrested in Canada. "Huawei complies with all applicable laws and regulations where it operates, including applicable export control and sanction laws and regulations of the UN, US and EU," the company said at the time.
For years now, the US has been seeking to ban the company's products for fear that the Chinese government will force Huawei to spy on Americans. Other countries allied with the US—such as Germany, Poland and Japan—have also been weighing similar bans on Huawei's equipment.