US charges Huawei with fraud, China tensions escalate

Huawei has been at the centre of tensions between the US and China. Photo/Washington Post.

The US Justice Department announced criminal charges Monday against Huawei Technologies, the world's largest communications equipment manufacturer, and one of its top executives - a move likely to intensify trade tensions between the US and China.

A 13-count indictment unsealed in New York against Huawei, two of its affiliated firms, and its CFO, Meng Wanzhou, accuses Huawei and an affiliate of bank fraud, wire fraud, and violating US sanctions on Iran. The company is also charged with conspiring to obstruct justice related to the investigation.

Canadian officials arrested Meng on a US warrant on December 1. She has been detained in Vancouver, British Columbia, since on bank fraud charges related to US sanctions law on Iran.

The top US law enforcement officials, including acting Attorney General Matthew Whitaker and FBI Director Christopher Wray, held a news conference in Washington to announce the charges.

Meng Wanzhou, CFO of Huawei Technologies, leaves her home while out on bail in Canada. Photo/Washington Post.

The charges come as the two countries' leaders seek to end their monthslong trade war and with China's lead trade negotiator, Liu He, scheduled to meet with US officials in Washington in coming days.

The Justice Department views Meng's criminal case as separate from the trade issues. It arose from a multiyear investigation into potential violations by Chinese companies of US sanctions on Iran.

This is pretty remarkable. Imagine if the Chinese government arrested the Apple CFO and charged Apple with fraud. https://t.co/I229NnpAwg

— Richard MacManus (@ricmac) January 28, 2019

Huawei is one of China's "national champions," an US$8.4 billion firm promoted and protected by the ruling Communist Party. Meng's arrest sparked outrage in China, which called for her immediate release and condemned the move as a US-led effort to thwart the telecom giant and constrain China's global ambitions.

Shortly afterwards, in a move widely seen as retaliation for Meng's arrest, Chinese authorities detained two Canadians, including a former diplomat, on security charges.

- Washington Post