Huawei Logo Uk Offices Daniel Leal Olivas Afp Getty Images 5e45b1aa9c10a

DoJ Charges Huawei with Racketeering, Illegal Trade with Iran and North Korea

Feb. 13, 2020
A superseding indictment unsealed February 13 says Huawei illegally used a subsidiary to violate trade sanctions against repressive regimes.

On February 13, 2020, the United States Department of Justice announced charges against Huawei Technologies Co. Ltd. for conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act, also known as RICO. The charges were contained in a superseding indictment, which has 16 counts in addition to a charge of conspiracy to steal trade secrets.

According to the charges, Huawei successfully stole intellectual property from six unnamed American technology companies. That intellectual property reportedly includes proprietary information involving robotics, cell phone antennas, and source code for internet routers.

The Justice Department says Huawei stole much of the information by simply violating confidentiality agreements with companies whose information they stole. Other information was allegedly stolen through intermediaries, including professors at research institutes or former employees of rival tech companies, whom Huawei asked to provide classified information. Huawei even had a policy in place to reward employees who obtained valuable information, the lawsuit says.

The FBI also claims that a Huawei subsidiary engaged in forbidden trade with countries under sanction, including Iran and North Korea.

Despite Huawei’s claims to the FBI that they only engaged in limited, legal operations with countries under sanction like Iran, the Chinese company is accused of operating an unofficial subsidiary, Skycom, which broke those sanctions by arranging shipments of Huawei goods and services to people in Iran and North Korea.

Huawei allegedly concealed those activities by internally referring to the countries in code: “A2” stood for Iran, “A9” for North Korea. The FBI further alleges that some of the technology Huawei used Skycom to provide to the Iranian state was used for such purposes as domestic surveillance of government protests in Tehran in 2009. Huawei has claimed that Skycom is not a subsidiary company, a claim the FBI says was a lie.

In a statement, the Justice Department said that investigation of the matter is ongoing, and encouraged "individuals with knowledge of misconduct by Huawei, its subsidiaries, employees or agents" to contact the FBI's New York Field Office.

About the Author

IW Staff

Find contact information for the IndustryWeek staff: Contact IndustryWeek

Sponsored Recommendations

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!