The US Justice Department has announced that it is filing criminal charges against Huawei Technologies, two Huawei affiliates, and one of its top executives, CEO Meng Wanzhou for violating Washington’s sanctions levied against Iran sanctions and for carrying out industrial espionage activities.

The indictment filed in New York also includes allegations of wire fraud and obstruction of justice by moving Huawei’s officials.

In a separate 10-count indictment filed in Washington DC, US authorities brought charges against two Huawei affiliates — Huawei Device Co. and Huawei Device USA — with conspiring to steal trade secrets. The charge focuses on the industrial espionage activities that Huawei employees carried out in 2013 which included stealing the technical details of a phone-testing robot from T-Mobile USA.

Acting US Attorney General Matthew Whitaker told a press conference in Washington that the case filed in New York is looking into a decade of criminal activity by Huawei officials. Further supporting the Justice Department’s claim, FBI Director Christopher Wray told the press that Huawei poses a threat to both the US’ “economic and national security”.

The EU has echoed the US’ concerns about Huawei’s attempts at conducting industrial espionage, as well as its close ties to China’s secret intelligence services. Individual European governments are looking to toughen their scrutiny and safeguards against Chinese technology companies and are potentially moving towards excluding them from the development of 5G infrastructure in Europe.

Earlier this month, a Huawei executive was arrested in Poland on charges of espionage.

Chinese arguments

Meng is the daughter of Huawei’s founder, Ren Zhengfei. She was taken into custody in Canada on December 1 after the US issued a warrant for her arrest. Canada’s Department of Justice received a formal request for her extradition to the United States, where she faces 30 years in prison if found guilty.

Huawei has, so far, issued relatively weak public claims that all illegal activity, including cases where spying was going on, were carried out by “rogue employees”. The FBI, however, is reportedly in possession of several hacked e-mails that confirm that Huawei actively encouraged and rewarded their personnel who took part in the theft of intellectual property and surveillance of US companies.

Beijing’s envoy to the EU, Zhang Ming, warned of retaliatory actions if Chinese companies are excluded from the development of 5G mobile projects.

Political Context

Huawei is a state-owned company and the biggest telecommunications company in the world and is now the second Chinese telecommunications company to be charged with violating sanctions against Iran. In 2017, China’s second-biggest telecommunications company, ZTE, was found guilty of circumventing international sanctions against the Islamic Republic, a charge that it had been under US investigation for since 2012. ZTE had diverted US-made equipment to Iran through a shell company chaired by Meng.

The criminal charges against Huawei come ahead of a second round of trade talks between the US and China. Should the negotiations fail, the US will proceed with a 25% tariff hike on Chinese goods that are worth $250 billion, which will take effect in March

Trump has offered to secure Meng’s release if China meets the US’ demands for a trade deal. Officials from the US Justice and Commerce departments have, however, reminded the White House that the two are not linked.