United States: Huawei Faces Trial for Extortion, Fraud, and Trade Secrets

The jury selection is set to open the trial before Federal Judge Ann Donnelly. The case, initiated several years ago, involves charges related both to Huawei’s activities in Iran and North Korea, its relationships with international banks, and technologies owned by American companies.

According to the indictment from the U.S. Department of Justice, Huawei and several related entities are being prosecuted notably for conspiracy under the federal RICO Act and for conspiracy to steal trade secrets. The prosecution argues that the group allegedly used fraud and deception to obtain technologies belonging to American competitors. These charges remain to be proven in court.

Prosecutors also accuse Huawei of having concealed from financial institutions certain activities conducted in Iran through Skycom, a company that the prosecution presents as effectively controlled by the Chinese group. Reuters reports that the case also includes charges related to money laundering, electronic fraud, and obstruction of justice.

Huawei disputes the accusations. Its lawyers have sought to have part of the case dismissed, arguing in particular that some allegations were too vague or relied on a questionable extraterritorial application of American law. The group has maintained for several years that the American lawsuits are part of a campaign aimed at curbing its international development.

A case dating back to the arrest of Meng Wanzhou

The case is partly related to the arrest in Canada, in December 2018, of Meng Wanzhou, then Chief Financial Officer of Huawei. Washington accused her of having deceived a bank about the links between Huawei and Skycom in order to facilitate transactions involving Iran.

Meng Wanzhou left Canada in 2021 following an agreement with the American prosecutors. Last June, Judge Ann Donnelly ruled that certain factual statements made by the former executive in this context could be used by the prosecution during Huawei’s trial.

The Department of Justice had expanded its case in 2020 with an indictment comprising sixteen counts, including a racketeering conspiracy and a conspiracy to steal trade secrets. The document also mentioned the group’s alleged activities in North Korea and its purported role in surveillance operations in Iran.

A trial under high technological tension

The trial comes as Huawei remains at the center of technological tensions between Washington and Beijing. The United States has imposed strict restrictions on the group for several years, particularly regarding access to certain technologies and advanced components.

Huawei has nevertheless strengthened its capabilities in smartphones, telecom equipment, and semiconductors, relying more heavily on Chinese supply chains. The criminal trial, which Reuters estimates could last about three months, now opens a new judicial phase in a dispute that has become one of the symbols of the Sino-American technological rivalry.