WASHINGTON/HONG KONG - Huawei's CFO
"should not be a hostage" in Sino-U.S. relations, her lawyer
said on Tuesday, after the United States announced criminal
charges against herself and the Chinese firm just days before
crunch trade talks with Beijing.
The Justice Department charged Huawei Technologies Co Ltd
and its chief financial officer with conspiring to
violate U.S. sanctions on Iran by doing business through a
subsidiary it tried to hide and that was reported on by Reuters
In a separate case, the Justice Department charged the
telecommunications equipment maker with stealing robotic
technology from T-Mobile US Inc. Huawei has said the
companies settled their dispute in 2017.
CFO Meng Wanzhou, the daughter of Huawei's founder, was
arrested in Vancouver on Dec. 1, a move which was followed by
China arresting two Canadians on national security grounds. She
is scheduled in court on Tuesday to discuss her bail terms, and
is subject to a U.S. extradition request.
Her lawyer Reid Weingarten, partner at Steptoe & Johnson,
pointed to "complex" Sino-U.S. relations.
"Our client, Sabrina Meng, should not be a pawn or a hostage
in this relationship. Ms. Meng is an ethical and honorable
businesswoman who has never spent a second of her life plotting
to violate any U.S. law, including the Iranian sanctions."
Huawei said it had sought to discuss the charges with U.S.
authorities "but the request was rejected without explanation".
It said it "denies that it or its subsidiary or affiliate
have committed any of the asserted violations" and "is not aware
of any wrongdoing by Ms. Meng."
China's foreign ministry urged the United States drop the
arrest warrant and end "unreasonable suppression" of Chinese
companies. Spokesman Geng Shuang also said China had issued
stern representations to both Canada and the United States after
the U.S. formally issued its extradition request for Meng.
Canada's Justice Minister has 30 days from receipt of the
request to decide whether to grant authority to proceed. If
granted, Meng's case would be sent to the British Columbia
Supreme Court for a hearing, which could take weeks or months.
The development is likely to upset talks between Beijing and
Washington this week as part of negotiations intended to walk
back trade tensions between the globe's two largest economies.
U.S. President Donald Trump said in December he could
intervene in Meng's case if it would serve national security
interests or help close a trade deal with China.
U.S. Commerce Secretary Wilbur Ross said the charges are
"wholly separate" from the trade negotiations.
MARKET RESTRICTION
Huawei makes equipment including base stations, switches and
routers, as well as consumer products such as smartphones, and
derives nearly half of its total revenue outside China.
Its global reach has come under attack from the United
States, which is trying to prevent U.S. companies from buying
Huawei equipment and is pressing allies to do the same. U.S.
security experts are concerned the gear could be used by China's
government for espionage - a concern Huawei calls unfounded.
Australia and New Zealand followed the U.S. lead in
restricting market access over the past year. On Tuesday, TPG
Telecom Ltd canceled the Huawei-based mobile phone
network it was building, in the first commercial casualty of
Australia's move.
Huawei nevertheless said it is the world's leading provider
of 5G technology, winning 30 contracts globally - more than any
of its competitors - including 18 in Europe.
It is unclear how the U.S. charges would impact its
business. Last year, Chinese peer ZTE Corp
was prevented from buying essential components from U.S. firms
after pleading guilty to similar charges, crippling its
operations.
ZTE resumed normal business after paying up to $1.4 billion
in fines and replacing its entire board, on top of a near $900
million penalty paid in 2017.
BANKING RELATIONS
U.S. Acting Attorney General Matthew Whitaker said the
alleged criminal activity at Huawei "goes back at least 10 years
and goes all the way to the top of the company." The charges
against Meng and Huawei cite the Reuters stories that said
Huawei's Skycom unit sought to sell goods to Iran.
The indictment noted that denials from Huawei in the stories
were relied upon by financial institutions "in determining
whether to continue their banking relationships with Huawei and
its subsidiaries."
The indictment featured a meeting in August 2013 between
Meng and an executive from an unidentified bank. Sources told
Reuters the bank is HSBC Holdings PLC, which paid $1.92
billion in 2012 for violating U.S. anti-money-laundering and
sanctions laws.
During the meeting, Meng misrepresented Huawei operations in
Iran and ownership and control of Skycom, the indictment showed.
The Justice Department has confirmed that HSBC is not under
investigation in this case, HSBC said in a statement last month.
Also according to the indictment, in July 2007, the FBI
interviewed Huawei founder Ren Zhengfei and U.S. authorities
said he falsely told them Huawei did not violate U.S. export
laws.
The indictment concerning trade secret theft alleged that
Huawei had a formal policy instituting a bonus program to reward
employees who stole confidential information from competitors.
FBI Director Christopher Wray said the Huawei cases, filed
in New York and Washington state, "expose Huawei's brazen and
persistent actions to exploit American companies and financial
institutions, and to threaten the free and fair global
marketplace."