Huawei lawyer says CFO Meng a 'hostage' after U.S.
presses charges
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[January 29, 2019]
By Diane Bartz, Sarah N. Lynch and Sijia Jiang
WASHINGTON/HONG KONG (Reuters) - Huawei's CFO "should not be a hostage"
in Sino-U.S. relations, her lawyer said on Tuesday, after the United
States announced criminal charges against herself and the Chinese firm
just days before crunch trade talks with Beijing.
The Justice Department charged Huawei Technologies Co Ltd and its chief
financial officer with conspiring to violate U.S. sanctions on Iran by
doing business through a subsidiary it tried to hide and that was
reported on by Reuters in 2012 https://reut.rs/2sRL7Ve and 2013 https://reut.rs/2sUq8RT.
In a separate case, the Justice Department charged the
telecommunications equipment maker with stealing robotic technology from
T-Mobile US Inc. Huawei has said the companies settled their dispute in
2017.
CFO Meng Wanzhou, the daughter of Huawei's founder, was arrested in
Vancouver on Dec. 1, a move which was followed by China arresting two
Canadians on national security grounds. She is scheduled in court on
Tuesday to discuss her bail terms, and is subject to a U.S. extradition
request.
Her lawyer Reid Weingarten, partner at Steptoe & Johnson, pointed to
"complex" Sino-U.S. relations.
![](http://archives.lincolndailynews.com/2019/Jan/29/images/ads/current/graue_18_MALIBU_010719.png)
"Our client, Sabrina Meng, should not be a pawn or a hostage in this
relationship. Ms. Meng is an ethical and honorable businesswoman who has
never spent a second of her life plotting to violate any U.S. law,
including the Iranian sanctions."
Huawei said it had sought to discuss the charges with U.S. authorities
"but the request was rejected without explanation".
It said it "denies that it or its subsidiary or affiliate have committed
any of the asserted violations" and "is not aware of any wrongdoing by
Ms. Meng."
China's foreign ministry urged the United States drop the arrest warrant
and end "unreasonable suppression" of Chinese companies. Spokesman Geng
Shuang also said China had issued stern representations to both Canada
and the United States after the U.S. formally issued its extradition
request for Meng.
Canada's Justice Minister has 30 days from receipt of the request to
decide whether to grant authority to proceed. If granted, Meng's case
would be sent to the British Columbia Supreme Court for a hearing, which
could take weeks or months.
The development is likely to upset talks between Beijing and Washington
this week as part of negotiations intended to walk back trade tensions
between the globe's two largest economies.
U.S. President Donald Trump said in December he could intervene in
Meng's case if it would serve national security interests or help close
a trade deal with China.
U.S. Commerce Secretary Wilbur Ross said the charges are "wholly
separate" from the trade negotiations.
MARKET RESTRICTION
Huawei makes equipment including base stations, switches and routers, as
well as consumer products such as smartphones, and derives nearly half
of its total revenue outside China.
Its global reach has come under attack from the United States, which is
trying to prevent U.S. companies from buying Huawei equipment and is
pressing allies to do the same. U.S. security experts are concerned the
gear could be used by China's government for espionage - a concern
Huawei calls unfounded.
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![](../images/012918pics/busine15.jpg)
Meng Wanzhou,
Huawei Technologies Co Ltd's chief financial officer (CFO), is seen
in this undated handout photo obtained by Reuters December 6, 2018.
Huawei/Handout via REUTERS
![](http://archives.lincolndailynews.com/2019/Jan/29/images/ads/current/brickey_lda_061314.png)
Australia and New Zealand followed the U.S. lead in restricting market access
over the past year. On Tuesday, TPG Telecom Ltd canceled the Huawei-based mobile
phone network it was building, in the first commercial casualty of Australia's
move.
Huawei nevertheless said it is the world's leading provider of 5G technology,
winning 30 contracts globally - more than any of its competitors - including 18
in Europe.
It is unclear how the U.S. charges would impact its business. Last year, Chinese
peer ZTE Corp was prevented from buying essential components from U.S. firms
after pleading guilty to similar charges, crippling its operations.
ZTE resumed normal business after paying up to $1.4 billion in fines and
replacing its entire board, on top of a near $900 million penalty paid in 2017.
BANKING RELATIONS
U.S. Acting Attorney General Matthew Whitaker said the alleged criminal activity
at Huawei "goes back at least 10 years and goes all the way to the top of the
company." The charges against Meng and Huawei cite the Reuters stories that said
Huawei's Skycom unit sought to sell goods to Iran.
The indictment noted that denials from Huawei in the stories were relied upon by
financial institutions "in determining whether to continue their banking
relationships with Huawei and its subsidiaries."
The indictment featured a meeting in August 2013 between Meng and an executive
from an unidentified bank. Sources told Reuters the bank is HSBC Holdings PLC,
which paid $1.92 billion in 2012 for violating U.S. anti-money-laundering and
sanctions laws.
During the meeting, Meng misrepresented Huawei operations in Iran and ownership
and control of Skycom, the indictment showed.
The Justice Department has confirmed that HSBC is not under investigation in
this case, HSBC said in a statement last month.
Also according to the indictment, in July 2007, the FBI interviewed Huawei
founder Ren Zhengfei and U.S. authorities said he falsely told them Huawei did
not violate U.S. export laws.
![](http://archives.lincolndailynews.com/2019/Jan/29/images/ads/current/american_legion_sda_2014.png)
The indictment concerning trade secret theft alleged that Huawei had a formal
policy instituting a bonus program to reward employees who stole confidential
information from competitors.
FBI Director Christopher Wray said the Huawei cases, filed in New York and
Washington state, "expose Huawei's brazen and persistent actions to exploit
American companies and financial institutions, and to threaten the free and fair
global marketplace."
(Reporting by Diane Bartz, Sarah N. Lynch in WASHINGTON and Sijia Jiang in HONG
KONG; Additional reporting by David Shepardson, Karen Freifeld, Chris Bing,
Joseph Menn and Andy Sullivan, and Michael Martina and Ben Blanchard in BEIJING;
Editing by Lisa Shumaker and Christopher Cushing)
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