“Theft, lies, cover-up”: Huawei goes on trial in US

A federal trial against Chinese technology giant Huawei began in Brooklyn on September 9, with US prosecutors accusing the company of stealing American technologies, Reuters reports.

"Theft, lies, cover-up," Taylor Stout, a trial attorney from the U.S. Department of Justice, ​said in the government's opening statement. "For 20 years, that's how Huawei, a massive Chinese telecommunications company, victimized American companies and abused the American ‌financial system, all in an effort to dominate the telecommunications industry around the world."

He said prosecutors would present testimony from “from people who caught Huawei red-handed trying to ​steal American tech”, as well as video footage allegedly showing a company employee stealing a robotic arm.

Huawei is accused of attempting to steal trade secrets from five US companies. These allegedly include the source code for Cisco Systems’ operating system for internet routers and a robotic arm used by T-Mobile to test phones, the prosecutor told jurors.

The case against Huawei was brought in 2018, when the company was charged with bank fraud and violating US sanctions after allegedly providing false information about its business activities in Iran.

The case is partly based on Reuters reports from 2012–2013 detailing close ties between Huawei and Skycom, a company operating in Iran. According to those reports, Skycom in 2010 offered to sell $1.5 million worth of embargoed Hewlett-Packard computer equipment to Iran’s largest mobile operator.

Huawei’s network equipment is currently banned in the United States, while US suppliers are prohibited from exporting goods and technology to the company without approval from the Department of Commerce, Reuters notes.

In its opening statement, Huawei’s defence argued that the company’s success was driven by innovation rather than theft. Defence lawyer Brian Heberlig described the incidents involving Cisco and T-Mobile as the “actions by individual employees”, saying Huawei took corrective measures after learning about them.

The defence also argued that there was no evidence Huawei knew that transferring funds in US dollars would violate US sanctions law, adding that the company could have kept the funds outside the United States or used another currency.

The Financial Times reported a day earlier that the trial is expected to last several months, creating a complicated backdrop for Chinese President Xi Jinping’s expected visit to Washington in September. During his first presidential term, Donald Trump said the case could become part of negotiations with China.

If convicted, Huawei could face one of the largest corporate-crime fines in US history, as federal law allows for a penalty of up to twice the amount gained from the alleged offence.