Huawei faces New York racketeering trial over trade secrets and sanctions

Huawei has gone on trial in New York over alleged theft, fraud and sanctions breaches. The case revives a long-running US-China technology and national security clash.

In Short

• Jury selection started in New York, with opening statements expected later
• Prosecutors allege Huawei stole technology and plotted broader trade secret theft
• The indictment links Huawei to Iran and North Korea sanctions violations

Huawei Technologies, one of China’s biggest technology companies, is facing a criminal racketeering trial in New York over allegations that it stole technology, plotted to steal US trade secrets, and committed wire and bank fraud, among other offences. Jury selection began on Tuesday afternoon, while opening statements were not expected before Wednesday at the earliest.

The indictment also accuses Huawei and some of its subsidiaries of doing business in North Korea despite US sanctions, and of installing surveillance equipment that helped Iran spy on protesters during the 2009 anti-government demonstrations. Huawei has denied wrongdoing and said the case brought by US prosecutors is “demonstrably false”.

In court filings, Huawei’s lawyers have sought dismissal of the case, arguing that the US allegations were too vague and wrongly tried to extend American authority beyond its borders. In a statement, the company said, “Long-term investment in innovation, backed by the utmost respect for intellectual property, has been the driving force behind Huawei’s business success.”

Huawei is the world’s biggest supplier of equipment for wireless telecom networks, but it is barred from selling equipment to US carriers over concerns that it poses a security risk. Other Western allies, including Canada and Britain, have also blacklisted the company.

The company also makes phones and other consumer electronics, but sanctions have cut it off from some other lines of business. More recently, Huawei has expanded into chipmaking as the artificial intelligence boom has increased demand for microprocessors.

During US President Donald Trump’s first term, his administration raised national security concerns about Huawei and lobbied Western allies against using the company’s products in next-generation high-speed wireless networks. The US announced the criminal charges in early 2019 and later widened the allegations.

Chinese officials, meanwhile, said the US government had engaged in “economic bullying” and had wrongly used national security as a pretext for “oppressing Chinese companies”.

US prosecutors have also accused Huawei of using a Hong Kong shell company, Skycom, to sell equipment to Iran in violation of US sanctions. They charged Huawei chief financial officer Meng Wanzhou with fraud, alleging that she misled HSBC about the company’s business dealings in Iran.

Meng, the daughter of Huawei’s founder, was arrested in Canada in late 2018 on a US extradition request. She was released in September 2021 in a high-stakes prisoner swap that freed two Canadians held by China and allowed her to return home. As part of that deal, the US dropped its extradition request and said it would dismiss the fraud charges against her.

Huawei, the biggest maker of network gear, has struggled to protect its market share under sanctions that blocked its access to most US processor chips and other technology. The restrictions pushed it to step up development of its own computer chips and other advanced technologies, even as it now fights the broad criminal case in New York.

With PTI Inputs

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