The Chinese telecommunication equipment making giant Huawei has been slapped with fresh charges by the United States Department of Justice. The Chinese firm has now been accused of stealing of trade secrets from U.S. technology companies for decades very successfully.
Huawei and its subsidiaries in the US as well as the company’s chief financial officer Meng Wanzhou were charged with 16-count superseding indictment in federal court in Brooklyn by federal prosecutors. The Racketeer Influenced and Corrupt Organizations Act, or RICO was used by the US prosecutors to level three new charges against Huawei which include racketeering conspiracy, conspiring to commit wire fraud and conspiring of stealing trade secrets of American companies.
A pair of indictments on 23 total counts of wire fraud, money laundering and theft of trade secrets was handed down against the company and Meng by federal grand juries in New York and Washington State in 2019.
The alleged stealing of intellectual property of US companies by Huawei helped it to dramatically reduce research expenses, said the Justice Department on Thursday, and added that this act allowed Huawei to gain "a significant and unfair competitive advantage."
"The misappropriated intellectual property included trade secret information and copyrighted works, such as source code and user manuals for internet routers, antenna technology and robot testing technology," the department said in a release. "As part of the scheme, Huawei allegedly launched a policy instituting a bonus program to reward employees who obtained confidential information from competitors. The policy made clear that employees who provided valuable information were to be financially rewarded."
In the superseding indictment, the US has also alleged that the Chinese tech firm had breached sanctions against countries like North Korea and Iran by delivering equipment to those countries through the company’s local intermediaries.
Huawei had used a subsidiary called Skycom to bypass the US sanctions on Iran to "obtain otherwise prohibited U.S.-origin goods, technology and services, including banking services, for HUAWEI's Iran-based business while concealing the link to HUAWEI," the prosecutors alleged. According to the US, Huawei was able to "claim ignorance" of the illegal activity because it had used unofficial channels such as Skycom.
The US Justice Department was trying to "irrevocably damage Huawei's reputation and its business for reasons related to competition rather than law enforcement," Huawei said in a statement reacting to the indictment. "The 'racketeering enterprise' that the government charged today is nothing more than a contrived repackaging of a handful of civil allegations that are almost 20 years old and that have never been the basis of any significant monetary judgment against Huawei," the company said. "The government will not prevail on these charges which we will prove to be both unfounded and unfair."
Huawie was effectively banned from doing any business in the US as well as with any American company in May last year after the US Department of Commerce put the Chinese firm in its so called ‘list of entities’. US has also been lobbying with its allies to follow suit. However Germany and the UK have already decided to allow Huawei to participate in a part of the construction of 5G networks in the countries.
(Source:www.cbsnews.com)
Huawei and its subsidiaries in the US as well as the company’s chief financial officer Meng Wanzhou were charged with 16-count superseding indictment in federal court in Brooklyn by federal prosecutors. The Racketeer Influenced and Corrupt Organizations Act, or RICO was used by the US prosecutors to level three new charges against Huawei which include racketeering conspiracy, conspiring to commit wire fraud and conspiring of stealing trade secrets of American companies.
A pair of indictments on 23 total counts of wire fraud, money laundering and theft of trade secrets was handed down against the company and Meng by federal grand juries in New York and Washington State in 2019.
The alleged stealing of intellectual property of US companies by Huawei helped it to dramatically reduce research expenses, said the Justice Department on Thursday, and added that this act allowed Huawei to gain "a significant and unfair competitive advantage."
"The misappropriated intellectual property included trade secret information and copyrighted works, such as source code and user manuals for internet routers, antenna technology and robot testing technology," the department said in a release. "As part of the scheme, Huawei allegedly launched a policy instituting a bonus program to reward employees who obtained confidential information from competitors. The policy made clear that employees who provided valuable information were to be financially rewarded."
In the superseding indictment, the US has also alleged that the Chinese tech firm had breached sanctions against countries like North Korea and Iran by delivering equipment to those countries through the company’s local intermediaries.
Huawei had used a subsidiary called Skycom to bypass the US sanctions on Iran to "obtain otherwise prohibited U.S.-origin goods, technology and services, including banking services, for HUAWEI's Iran-based business while concealing the link to HUAWEI," the prosecutors alleged. According to the US, Huawei was able to "claim ignorance" of the illegal activity because it had used unofficial channels such as Skycom.
The US Justice Department was trying to "irrevocably damage Huawei's reputation and its business for reasons related to competition rather than law enforcement," Huawei said in a statement reacting to the indictment. "The 'racketeering enterprise' that the government charged today is nothing more than a contrived repackaging of a handful of civil allegations that are almost 20 years old and that have never been the basis of any significant monetary judgment against Huawei," the company said. "The government will not prevail on these charges which we will prove to be both unfounded and unfair."
Huawie was effectively banned from doing any business in the US as well as with any American company in May last year after the US Department of Commerce put the Chinese firm in its so called ‘list of entities’. US has also been lobbying with its allies to follow suit. However Germany and the UK have already decided to allow Huawei to participate in a part of the construction of 5G networks in the countries.
(Source:www.cbsnews.com)
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