Huawei Denies Iran Sanction Charges Leveled in US

James Cole, left, Michael Alexander Levy, center, and David Bitkower, right, lawyers for the Chinese electronics giant Huawei, leave Brooklyn federal court in New York on March 14, 2019. Huawei faces charges in the case of violating Iran trade sanctions. (AP Photo/Bebeto Matthews)

BROOKLYN, N.Y. (CN) – Chinese telecommunications giant Huawei and a U.S. subsidiary pleaded not guilty Thursday to charges including conspiracy, fraud and money laundering.

In a sweeping superseding indictment filed in January, federal prosecutors in the Eastern District of New York accused Huawei of violating U.S. sanctions on Iran by doing business with the Middle Eastern country.  

According to the indictment, Huawei used a subsidiary called Skycom Tech Co. Ltd. to deal with its Iran affairs. Skycom is also named on the indictment but was not arraigned Thursday. Huawei was represented at the hearing by James M. Cole of Sidley Austin.

“Huawei operated Skycom as an unofficial subsidiary to obtain otherwise prohibited U.S.-origin goods, technology and services, including banking services, for Huawei’s Iran-based business while concealing the link to Huawei,” the indictment says.

U.S. Magistrate Judge Ramon Reyes asked prosecutors Thursday for an update on this particular group.
“What’s the deal with Skycom?” he said in court. “When are they going to be arraigned?”

Assistant U.S. Attorney David Kessler responded that the government was working on it.

“Given the publicity of this case,” he added, “they may already be aware” of the impending proceedings.

On U.S. orders, Huawei Chief Financial Officer Meng Wanzhou was arrested in Canada in December and is out on $7.35 million bail there, awaiting possible extradition to the United States. She is also named on the indictment.

Meng is the daughter of Huawei founder Ren Zhengfei, formerly an engineer in China’s People’s Liberation Army, which serves China’s ruling Communist government. U.S. officials have long regarded Huawei with suspicion due to its close ties to China’s government, though the company has denied its devices could be used for spying.

Headquartered in Shenzhen, Guangdong, China, Huawei is the world’s second-largest smartphone manufacturer. The company reported more than $100 billion in annual revenue for 2018.

Meng sued the Canadian government earlier this month, claiming law enforcement officials violated her constitutional rights by arresting, detaining and interrogating her unlawfully “under the guise of a routine customs or immigration related examination” at Vancouver International Airport this past December.

Because of the complexity of the case and the defendants’ need for an extension of time to work out protective orders and other logistics for the discovery process, the parties’ next appearance is scheduled for April 4 at 11:30 a.m. before U.S. District Judge Ann Donnelly.

NATO Secretary-General Jens Stoltenberg said Thursday that the group would think about its response to member nations’ cybersecurity concerns about Huawei.

The allies “will continue to consult, continue to assess, and look into whether NATO has a role to play,” Stoltenberg said.

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