It was another bad week for Huawei: A public relations executive was arrested on spying charges in Poland Thursday, and the U.S. Commerce Department blocked shipment of the company’s equipment back to Hong Kong this week. This is on top of the continuing saga of the December arrest of the company’s top finance executive.
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The U.S. government has shown it intends to take action on more than a decade of accusations against the company at a tenuous time for U.S.-China relations. The moves against Huawei also calls into question how the company will be able to expand the reach of its 5G equipment in the West, and how companies it competes with, like Apple, may be perceived among Chinese consumers.
Here are the three big cases involving Huawei this week and what they mean for the company:
Huawei, long accused of spying, trade secrets theft and sanctions violations by U.S. intelligence, has denied the bulk of these allegations. Part of the company’s past arguments have been that its executives have never faced formal charges of spying.
That changed Thursday, when Polish law enforcement officials arrested a prominent Chinese Huawei executive in the country, according to The Wall Street Journal. The man, identified by Journal sources as a public relations officer and sales executive, was detained alongside a Polish government information technology official.
The allegations in Poland include that the Huawei executive colluded with local officials to create avenues for collecting government information via the company’s equipment there.
Huawei’s research and development company, Santa Clara, Calif.-based Futurewei Technologies, was blocked this week from shipping telecommunications equipment and software manufactured stateside. The Commerce Department called the equipment a security risk.
It’s part of a multi-pronged effort “to ratchet up the pressure on China,” said Tom Kellerman, CEO of cybersecurity company Carbon Black and a former top cybersecurity official for The World Bank. “Their belief is that the entirety of the Huawei supply chain is compromised.”
Huawei has excelled in the production of telecommunications equipment, including equipment meant to provide 5G functionality. But pervasive intelligence concerns, which Huawei has long argued are politically motivated, has led to bans in several countries of Huawei’s telecom and 5G equipment, including the U.S., Japan, India and Australia.
The U.S. has until the end of January to file a formal extradition request in the highly controversial arrest of Huawei’s chief financial officer.
In response to this arrest, China has reportedly arrested up to 13 Canadians working in Canada, and has threatened other retaliatory measures should Canada opt to extradite Meng to the United States. Meng has been accused of fraud related to payments allegedly made through international banks between a Huawei supplier in Hong Kong and Iran, a sanctioned country.
It is unclear whether the Department of Justice will go forward with the extradition request, or whether Canada will instead try to resolve the matter within its borders. Huawei has denied the allegations against Meng, and most recently, China’s ambassador to Canada said Canada’s demand for the release of its detained citizens as examples of “double standards” and “white supremacy.”