US Prosecutors File Additional Charges Against Huawei... Warning to the World Ahead of the 5G Era Opening

Additional Indictment with 16 New Charges Including Violations of North Korea Sanctions

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jaehee] The U.S. prosecutors have filed additional charges against Huawei, the world's largest telecommunications equipment manufacturer and smartphone maker based in China. The new indictment includes a total of 16 new charges, including allegations of stealing trade secrets from U.S. companies, violating North Korea sanctions, and conducting business with North Korea. This appears to be an increased pressure from the U.S. on Huawei ahead of the full-scale launch of the 5G telecommunications equipment market.

According to U.S. media such as The Wall Street Journal (WSJ) on the 13th (local time), the New York federal prosecutors stated in an indictment submitted to the Brooklyn Federal Court that Huawei and its U.S. subsidiaries violated the Racketeer Influenced and Corrupt Organizations Act (RICO), which punishes corporate corruption crimes.

The RICO Act is a law that deals with organized corruption crimes such as criminal groups or corporate fraud.

The indictment targets Meng Wanzhou, the daughter of Huawei’s founder and the company’s Chief Financial Officer.

The prosecutors claim that Huawei conspired to steal trade secrets from U.S. companies starting in 2002. According to the prosecutors, Huawei signed confidentiality agreements with U.S. tech companies but violated these contracts by hiring employees from other companies and instructing them to steal intellectual property from their former employers.

In particular, Huawei is also accused of deceiving the U.S. government by conducting business in North Korea despite U.S. sanctions. The additional charges include new suspicions about Huawei’s involvement with sanctioned countries such as Iran and North Korea.

Regarding the Iran case, it was identified that Huawei installed surveillance equipment that allowed the Iranian government to monitor protesters during the anti-government demonstrations in 2009.

The prosecutors stated that the intellectual property stolen by Huawei from U.S. companies included source codes and trade secret information such as internet routers, antenna technology, robot testing technology, user manuals, and copyrighted information.

Meanwhile, in January last year, the New York State prosecutors indicted Huawei, some of its subsidiaries, and Meng on 13 charges including financial fraud and technology theft. The Washington State prosecutors also indicted Huawei on 10 charges including theft of trade secrets from the U.S. telecom company T-Mobile and obstruction of justice.

This additional indictment is analyzed as a warning message from the Donald Trump administration to countries around the world. This is because the 5G market is officially opening this year, and European countries including the United Kingdom are showing movements to adopt Huawei equipment. According to market research firm Dell’Oro, Huawei held a 31.2% market share in the 5G telecommunications equipment market as of the third quarter of last year, ranking first.