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Thompson Hine LLP, a full-service business law firm with approximately 400 lawyers in 11 offices, was ranked number 1 in the category “Most innovative North American law firms: New working models” by The Financial Times and was 1 of 7 firms shortlisted for The American Lawyer’s inaugural Legal Services Innovation Award. The firm has been recognized by the National Law Journal as a Legal Technology Trailblazer and featured by Bloomberg for its innovative service delivery models, which drive accuracy and predictability. The firm’s commitment to innovation is embodied in Thompson Hine SmartPaTHTM – a smarter way to work – predictable, efficient and aligned with client goals. For more information, please visit ThompsonHine.com and ThompsonHine.com/SmartPaTH.

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The U.S. Department of Justice (DOJ) unsealed two separate indictments on Monday, January 28, 2019, charging Chinese telecommunications giant Huawei with 23 counts of criminal activity. In the Eastern District of New York (EDNY), a <a href="https://www.justice.gov/usao-edny/press-release/file/1125036/download" target="_blank" rel="noopener">13-count indictment</a> was released charging four defendants affiliated with Huawei. In the indictment, Huawei Technologies Co., Ltd., Huawei Device USA Inc., Skycom Tech Co. Ltd. (Skycom) and Huawei&rsquo;s Chief Financial Officer Wanzhou Meng were charged with a variety of crimes, including bank fraud, conspiracy to commit bank fraud, wire fraud and violations of the International Emergency Economic Powers Act (IEEPA), which serves as the statutory authority for the Iranian Transactions Sanctions Regulations (ITSR). In the Western District of Washington, the <a href="https://www.justice.gov/opa/press-release/file/1124996/download" target="_blank" rel="noopener">second unsealed indictment</a> charges Huawei Device Co., Ltd. and Huawei Device USA, Inc. with 10 counts of theft of trade secrets conspiracy, attempted theft of trade secrets, wire fraud and obstruction of justice where Huawei employees were allegedly encouraged to steal technology from T-Mobile USA, Inc., a large U.S. telecommunications company.
These indictments were unsealed just two days before scheduled bilateral talks in Washington, D.C. between high-ranking officials of the U.S. and Chinese governments seeking to end the trade dispute between the two countries. Vice Premier Liu He and USTR Robert Lighthizer are expected to discuss the tariff war between the two countries and possible reform of China&rsquo;s intellectual property and technology transfer policies. It is unclear if these recent developments involving Huawei will impact that agenda. Secretary of Commerce Wilbur Ross <a href="https://www.commerce.gov/news/speeches/2019/01/remarks-us-commerce-secretary-wilbur-l-ross-department-justice-announcement" target="_blank" rel="noopener">stated</a> that the indictments are &ldquo;law enforcement actions, and are wholly separate from our trade negotiations with China.&rdquo; Secretary of the Treasury Steven Mnuchin stated that &ldquo;It&rsquo;s a separate issue and a separate dialogue.&rdquo;
At a news conference and in a subsequent DOJ <a href="https://www.justice.gov/opa/pr/chinese-telecommunications-conglomerate-huawei-and-huawei-cfo-wanzhou-meng-charged-financial" target="_blank" rel="noopener">publication</a>, Director of the Federal Bureau of Investigation (FBI) Christopher Wray stated, &ldquo;Companies like Huawei pose a dual threat to both our economic and national security, and the magnitude of these charges make clear just how seriously the FBI takes this threat. Today should serve as a warning that we will not tolerate businesses that violate our laws, obstruct justice, or jeopardize national and economic well-being.&rdquo; Ross echoed Wray&rsquo;s sentiment, stating, &ldquo;For years, Chinese firms have broken our export laws and undermined sanctions, often using U.S. financial systems to facilitate their illegal activities. This will end.&rdquo;
In the EDNY indictment, Huawei is charged with substantive violations of U.S. sanctions and export laws restricting certain financial activities and sales of telecommunications equipment to Iran. Huawei and Skycom, a fully-controlled subsidiary of Huawei, allegedly engaged in activity between 2007 and 2014 to &ldquo;knowingly and willfully conspire to cause the export, reexport, sale and supply, directly and indirectly, of goods, technology and services&rdquo; to Iran of various embargoed advanced telecommunications equipment. The indictment further alleges that Huawei and Skycom &ldquo;knowingly and willfully&rdquo; conspired to defraud the United States by &ldquo;impairing, impeding, obstructing and defeating, through deceitful and dishonest means, the lawful governmental functions and operations of OFAC&rdquo; and its enforcement of U.S. economic sanctions. It is also alleged that Huawei repeatedly misrepresented the true nature of Skycom to various financial institutions in order to avoid U.S. sanctions in place at the time on dollar clearing services. It is alleged that &ldquo;Huawei operated Skycom as an unofficial subsidiary to obtain otherwise prohibited U.S.-origin goods, technology and services, including banking services, for Huawei&rsquo;s Iran-based business while concealing the link to Huawei.&rdquo;
With bilateral negotiations underway to resolve the tariff war and recent bipartisan <a href="https://www.warner.senate.gov/public/index.cfm/pressreleases?id=F3E2248C-BE6F-4947-8F1C-1896C2FFAA77" target="_blank" rel="noopener">legislation</a> introduced to combat technology threats from China in both the House and Senate, companies should carefully consider the policy implications and continued uncertainty of U.S.-China relations.

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Chinese Telecom Giant Huawei Charged with Substantive Sanctions Violations; 23 Total Criminal Charges Overall