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US charges Huawei over Iran sanctions, stealing of trade secrets

The US Justice Department unveiled 13 charges against Meng Wanzhou, the daughter of Huawei’s founder Ren Zhengfei, and two affiliates related to violating the US sanctions on Iran.

The United States (US) Justice Department has filed a slew of criminal charges against Chinese telecommunications giant Huawei and its chief financial officer, Meng Wanzhou. The charges include technology theft and defrauding banks to evade sanctions on Iran.

The US Justice Department unveiled 13 charges against Ms Meng, the daughter of Huawei’s founder Ren Zhengfei, and two affiliates related to violating the US sanctions on Iran.

Ms Meng is currently out on bail in Canada. The case which involved her detainment in Canada, had sparked anger from China and placed the US and Canada lawmakers in a tight spot as both the US and China are having ongoing trade talks.

An additional 10 US federal charges were filed against two Huawei affiliates for allegedly stealing robot technology from US-based wireless network operator T-Mobile.

US' Federal Bureau of Investigation director Christopher Wray said in an AFP report that both sets of charges ‘expose(s) Huawei's brazen and persistent actions to exploit American companies and financial institutions, and threaten(s) the free and fair global marketplace.’

Technology theft

The US has long been complaining on unfair competition from China with claims that Chinese companies are stealing trade secrets from Western companies. China on the other hand, has been viewing the US’ clampdown and calls of technology theft as attempts to oppress China’s technological rise.

US officials have stressed that the Huawei charges, albeit timely with the upcoming trade talks this week, are not to be grouped together.

‘Those two things are not linked. They're a totally separate process. The negotiations on the trade front will continue to be ongoing,’ White House press secretary Sarah Sanders told reporters at a briefing.

Commenting on the Huawei case, IG market analyst Pan Jingyi said: ‘Despite the insistence from the US, it is difficult to clearly separate the two issues.’

Ms Pan noted that the market has reacted negatively towards the issue, but highlighted that other announcements coming from Washington, US, have showed positive developments on the trade truce.

‘The possibility of US President Donald Trump meeting with Chinese vice premier in Washington this week, (could) potentially lend weight to the meeting,’ Ms Pan said.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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