14 charges including Iran business dealings... 'Guilty verdict would bolster US sanctions on Huawei'

Promotional materials for Chinese tech firm Huawei's 5G wireless technology are displayed at the PT Expo held in Beijing in September 2018. [AP]
Promotional materials for Chinese tech firm Huawei's 5G wireless technology are displayed at the PT Expo held in Beijing in September 2018. [AP]

A criminal trial against Chinese tech giant Huawei has opened in a US federal court, just as a US-China summit is set to take place this month.

The US District Court for the Eastern District of New York in Brooklyn began jury selection for the Huawei trial on Tuesday (local time). Reuters and the Hong Kong-based South China Morning Post reported the development. The proceeding comes some seven years after US prosecutors first indicted the company in 2019.

Huawei faces charges of deceiving banks, including HSBC, over its business dealings in sanctioned Iran and of conspiring to steal trade secrets from five US technology firms. The company is also accused of making false statements about its dealings with North Korea and supplying Iran's government with equipment to track anti-government protesters during 2009 demonstrations in Tehran. Additional charges include money laundering, racketeering, wire fraud and obstruction of justice. In all, US prosecutors have brought 14 charges against Huawei.

The trial, presided over by Judge Ann Donnelly of the Brooklyn federal court, is expected to run for about three months, Reuters said.

The case first came to light in 2018, when Meng Wanzhou was arrested in Vancouver, Canada. Meng is Huawei's deputy chairwoman and chief financial officer, and the daughter of company founder Ren Zhengfei. The arrest took place on the same day that then-President Donald Trump, in his first term, and Chinese President Xi Jinping met in Argentina amid a trade war. The two leaders agreed to a 90-day truce.

Meng spent more than two years under house arrest at a mansion in Canada following her arrest, until 2021, a period during which relations between China and the US and Canada cooled.

The US government, citing concerns that China could use Huawei equipment for espionage, effectively pushed Huawei out of the US market. It also pressed other countries to exclude the company from their telecommunications networks. China, for its part, arrested and detained American and Canadian citizens.

The US allowed Meng to return home after she signed a statement admitting that Huawei had lied to US financial institutions.

"This trial will bring closure to one of the earliest and most closely watched fights the US government has waged against a Chinese company," Reuters said. "A guilty verdict on the Iran-related charges would bolster the US decision in 2019 to place Huawei on a trade blacklist over criminal conduct that threatened national security," it added.

Observers also expect that a guilty finding in court could bring hefty fines or the forfeiture of criminal proceeds.

"The fine will be determined based on the profits the company earned, then multiplied according to the severity of the wrongdoing, and the amount could range from hundreds of millions to billions of dollars," said Todd Haugh, a business law professor at Indiana University. "If there is a guilty verdict, there will be a major fight over proving how much profit Huawei made from its criminal conduct."

There is also speculation that the Huawei trial could become entangled with the US-China summit scheduled for Sept. 24.

Ahead of the summit, the US has been issuing a steady stream of messages emphasizing "the China threat" across trade, science and technology. Huawei, once a symbol of "patriotic consumption" in China's resistance to US sanctions, has, with state support, become a core company leading China's drive for semiconductor self-sufficiency.


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