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U.S. Accuses Huawei of Stealing Trade Secrets, Defrauding Banks

336 points by ericzawo 8y ago

Hongwei 8y ago
Speaking as a Canadian, this is already old news for us. There have been lively debates over on /r/canada, which went very one-sided (understandably) after China arrested two Canadians as leverage. [1] As someone who likes to follow geopolitics, I can't help but wonder if the timing of this extradition request was strategic. When Meng was arrested, Canada was in the middle of NAFTA/USMCA re-negotiations and our Prime Minister was publicly musing about diversifying our trade partnerships, specifically focused on engaging with China. The automatic arrest of one of China's "royals" per our extradition treaty with the US was an extremely effective way of erasing our only major leverage on that negotiation. IIRC the charge of bank fraud for business dealings in Iran was largely unrelated to Huawei's (sketchy) telco business. Kind of like how they got Al Capone on tax evasion. [1] https://www.nytimes.com/2018/12/12/world/asia/michael-spavor-canadian-detained-china.html https://www.nytimes.com/2018/12/12/world/asia/michael-spavor...
- greglindahl 8y ago
  This is the first release of the details of the US case. It's hard to see how a significant new release of information in the case could be "old news"?
  - Hongwei 8y ago
    If you read the story, the major event is the case against Huawei CFO Wanzhou Meng. She was arrested in Vancouver per a US extradition request back in December. Most of this new article is providing background on the charges against her and then talking generally about potential cyber risks of Made-in-China silicon. Here's the Bloomberg article dated December 5th. https://www.bloomberg.com/news/articles/2018-12-05/huawei-cfo-arrested-in-canada-as-u-s-seeks-her-extradition https://www.bloomberg.com/news/articles/2018-12-05/huawei-cf... That has since ballooned into a huge diplomatic crisis for Canada, which has had it's citizens arrested in China and subjected to sleep deprivation interrogation and who knows what else (can't find source. read somewhere). There are active calls for our national telco's to ban Huawei's tech in our 5G infrastructure. The latest round of controversy was when Telus, one of the three major cellular providers, publicly endorsed Huawei and confirmed it will be moving ahead with their hardware purchase. So yes, for us it is old news.
    - greglindahl 8y ago
      As I said, this is the first release of the details of the charges. I'm already familiar with the history of the case, I've been following it closely.
      - Hongwei 8y ago
        Nothing in the article is substantially new, as someone who's been following this story closely. Perhaps coverage of this story for you as (presumably) an American is lighter than it has been for us up here. That's okay, and I wasn't speaking for you when I meant "us Canadians." Sorry.
        marcell 8y ago
        My understanding (perhaps wrong) is that this was the first instance of the US issuing a formal charge. Previously, the executive was arrested and prevented from leaving Canada. The new development is that the US has specified what they are accusing this executive of, whereas previously that was not public. The significance is that before they formally charge her, there is room for face saving maneuvers. For example the US could have agreed to press lesser charges as a result of a backroom deal with China. After this new development, that is not an option for the US.
        tivert 8y ago
        > Nothing in the article is substantially new, as someone who's been following this story closely. The stuff on the filing of formal charges is new. The (literal) date-stamp on the indictment is from Thursday: https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rIz2tT7h2.Fs/v0 https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rIz2tT7h... Since there's some redaction (and the flurry of posts on this exact same topic), I'm guessing it took until today for them to be publicly released. Another thing that's new (to me at least) is that they indicted Huawei itself, not just Mrs. Meng. A lot of the previous reporting that I read focused on her actions exclusively (probably due to extradition hearing).
- 2stop 8y ago
  I don't understand how a charge against a company (Huawei) can result in a extradition request of an individual (the CFO at that)... So if Australia passes some tax law that Google doesn't comply... We can extradite Larry Page? Or Sergey?
- eganist 8y ago
  Counter-thought: the pro-diversity trade position might've been an intentional diplomatic measure to pre-empt the blowback from the arrest. "We're pro-trade; it's the PRC/Chinese who goofed."
  - equalunique 8y ago
    Counter-thoughts like these are always worth considering.
- jdfiugikdf823 8y ago
  The whole situation is somewhat baffling. It makes sense if US considers Huawei a major future competition to US interests ( not an unreasonable assumption ) given recent arrest in Poland[0]. The main difference there though was: no royals in that case though so Huawei just fired the guy. [0]https://www.cnn.com/2019/01/11/tech/poland-huawei-exec-arrest/index.html https://www.cnn.com/2019/01/11/tech/poland-huawei-exec-arres...
- FreedomToCreate 8y ago
  Not true. USMCA was signed before the arrest. Approx USMCA was finalized on Nov 30 (negotiated in the months before that. Meng was arrested on Dec 1). Citations: https://www.npr.org/2018/11/30/672150010/usmca-trump-signs-new-trade-agreement-with-mexico-and-canada https://www.npr.org/2018/11/30/672150010/usmca-trump-signs-n... https://www.cnn.com/2018/12/05/tech/huawei-cfo-arrested-canada/index.html https://www.cnn.com/2018/12/05/tech/huawei-cfo-arrested-cana...
  - Hongwei 8y ago
    Can't argue with that. Thanks for correcting my fuzzy memory! In the same vein, this still removes the "we can always take our business over there" card that our PM was waving around.
    - tw04 8y ago
      It seems extremely unlikely that China would refuse to do business with Canada over one persons arrest. The way they need their economy to continue growing they can't turn down a major source of revenue like Canada.
    - superioritycplx 8y ago
      The same PM was nicknamed "small potato" by Chinese.
- spiritcat 8y ago
  I wouldn't give our leaders that much credit.
- openloop 8y ago
  Seems fishy to me.
- hockindusk 8y ago
  Ah, yes, Canada has really been the target of Chinese hate lately some gems: 'Canada is a white supremacist foreign enemy' -- Chinese state media accelerates propaganda against Canada https://nationalpost.com/news/canada/canada-is-a-naive-american-lapdog-what-chinese-media-has-been-saying-about-us https://nationalpost.com/news/canada/canada-is-a-naive-ameri... China Just Likened Canada to a ‘Whore’ For Firing John McCallum https://www.vice.com/en_ca/article/8xynnv/china-just-likened-canada-to-a-whore-for-justin-trudeau-firing-john-mccallum?utm_source=reddit.com https://www.vice.com/en_ca/article/8xynnv/china-just-likened...
- pishpash 8y ago
  > There have been lively debates over on /r/canada, which went very one-sided (understandably) after China arrested two Canadians as leverage. Which just shows how much this is not a rational debate, and never will be, when nationalism is involved.
- baybal2 8y ago
  > The automatic arrest of one of China's "royals" per our extradition treaty with the US was an extremely effective way of erasing our only major leverage on that negotiation. That's not the only leverage, the other one is PM's extradition veto, which they seem to be so quiet about. If I were the chairman, I would've jumped out of the bed to fly to Canada and propose a trade pact the very moment Trump threw a tantrum at Canada, and EU. Sealing off US trade access to their two biggest trade allies, that's priceless. Xi's passive, paralysed by fear, stance from the start has doubled the damage China took.
sjroot 8y ago
I have to be honest — the allegations made here do not surprise me. The days of corporate espionage seem alive and well, and China’s image in the United States is taking a significant hit. It isn’t fair to the honest, hard-working Chinese nationals who want to build a life outside their homeland.
- pointillistic 8y ago
  But is it fair to the Americans who lost jobs, manufacturing, future, because of the 20 years of "technology transfer" by China?
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  - shard972 8y ago
    It's ok, those people will be replaced soon.
  - pishpash 8y ago
    Ask the American companies and the richly retired CEO's who banged on China's door in the 80's demanding to outsource there.
  - Nasrudith 8y ago
    You are blaming the wrong people there. Anyone with half a brain would realize moving manufacturing into a high population country would create competitiors who now know the fundamentals of your business. And who can do the math to figure out they can claim the market taking advantage of the cheap labor and expensive markets. But Wall Street has a frothing hatred of people who think beyond the next fiscal quarter. Just look at the sheer Tesla short ratio long after it was clear they were viable.
- pishpash 8y ago
  Since when was China's image in the United States ever great? It's one racist yellow peril after another since the 1800's. The undertone to all of this handwringing has always been the racist assumption that the Chinese cannot possibly be capable of succeeding in a fair competition, and therefore there must be fraud involved. All said and done, people always find evidence of what they insist on believing in the first place.
panarky 8y ago
These look like serious charges: Defrauding four large banks into clearing transactions with Iran in violation of international sanctions. Conspiracy to obstruct justice by moving employees out of the United States so they could not be called as witnesses before a grand jury in Brooklyn. Conspiracy to defraud the United States by impairing, impeding, obstructing and defeating, through deceitful and dishonest means, the lawful governmental functions of an agency of the United States. Money laundering conspiracy. Conspiracy to steal trade secrets about robotics from a competitor, T-Mobile. Source: https://www.nytimes.com/2019/01/28/us/politics/meng-wanzhou-huawei-iran.html https://www.nytimes.com/2019/01/28/us/politics/meng-wanzhou-... If the charges are true, I hope Ms. Meng is extradited and prosecuted, and the company barred from operating in the US. But if this is just a bargaining chip to be exchanged for a few worthless face-saving trade deal "wins" for this administration, it will be disgrace.
- conover 8y ago
  The actual indictment: https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rIz2tT7h2.Fs/v0 https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rIz2tT7h... (PDF Warning) Wire fraud is really serious. It looks like the government intends on going the full distance in this case.
  - panarky 8y ago
    It's notable that some of the evidence against Ms. Meng consists of "an electronic device that contained a file in unallocated space -- indicating that the file may have been deleted" (page 8 of the indictment). Did authorities seize and image her devices at JFK?
    - conover 8y ago
      I noticed that as well. I am super curious about how they obtained that information. I assume it will come out at trial, if it gets that far.
- nostromo 8y ago
  > But if this is just a bargaining chip to be exchanged for a few worthless face-saving trade deal "wins" for this administration, it will be disgrace. The indictment spans more than a decade; this definitely predates the current administration.
bitxbit 8y ago
It boggles my mind why the Chinese choose to take on nefarious endeavors when they are already ahead.
- MichaelApproved 8y ago
  It's not like they started after they got ahead. Nefarious tactics are a large part of how they got ahead.
  - bitxbit 8y ago
    They’ve been ahead for awhile now, at least a decade in some areas. This is akin to the Warriors getting caught cheating every other game.
    - glitchc 8y ago
      Not sure if they’re ahead in any area exactly. Do you have specifics?
      - arwhatever 8y ago
        Consumer drone technology. :-)
        glitchc 8y ago
        Indeed. And to answer my own question: Landing on the dark side of the moon.
  - seppin 8y ago
    Ask Uber how hard it is to change the culture once you're on top.
- deleted 8y ago
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educationdata 8y ago
In China, stealing trade secrets is called “打破技术封锁” (breaking the technical blockade). The U.S. does not even need to collect evidence through investigation. Just by reading Chinese news reports and textbooks, you will find there are lots of Chinese nationalist stories about their hero technician / scientists steal western technologies. They are literally proud of it. I heard from my Chinese friends who work in the US universities in the field of EE, CS, material, etc.. Huawei actually has personnel monitoring their university webpages. Add working project to your webpage, Huawei could call/email you the next day (in Chinese of course) if they find something they want to buy to get ahead.
- baroffoos 8y ago
  Sharing knowledge and advancing technology for everyone is something to be proud of. Society needs to end the practice of hoarding private knowledge.
  - sovietmudkipz 8y ago
    I think the idea behind intellectual property is to encourage people to take risks associated with developing something new and profit through their innovations. If all new discoveries were the property of the state/public then there wouldn't be a high incentive to be inventive for any given individual. It's like if everyone was a farmer but everything harvested was immediately taken from the farmer. Why would any farmer put in effort to increase yield when they would not profit from their extra effort?
    - ndnxhs 8y ago
      Its unfortunate that out economical system discourages sharing and rewards those who act selfishly. If the farmers needs were taken care of, they would push to make better tech to make their lives easier and provide more food for the rest of their country.
      - sovietmudkipz 8y ago
onetimemanytime 8y ago
No doubt Huawei did this. And no doubt Trump will wipe their slate clean for a trade deal. So it sucks for Canada. US has sanctions on Iran, not China so getting around them is not considered a crime for them. Of course they will steal any technology them deem essential for their business. Bank fraud is probably lying to banks about doing business with Iran, not cheating them of money.
- panarky 8y ago
  It's conspiracy to commit bank fraud if you lie to a US bank to get them to clear US dollar transactions in violation of sanctions. Banks pay astronomical fines for evading sanctions. Infographic -> https://www.refinitiv.com/content/dam/gl/en/documents/infographics/fines-for-banks-that-breached-us-sanctions-infographic.pdf https://www.refinitiv.com/content/dam/gl/en/documents/infogr... And it's conspiracy to defraud the United States if you obstruct or defeat an agency of the US government. Also money laundering, wire fraud, stealing trade secrets, etc.
  - onetimemanytime 8y ago
    Like I said, they do not consider it a crime. Lying to the banks was means to an end--doing business with Iran. Like if you deal drugs, you will also evade taxes.
    - EpicEng 8y ago
      >Like if you deal drugs, you will also evade taxes And if they IRS finds out they are coming after you. They don't care that the money was made illegally. Besides, these sanctions we're passed by the UN, not the US, and China is a voting member.
    - Pyxl101 8y ago
      > Like if you deal drugs, you will also evade taxes. Not necessarily. You could choose to pay taxes on that income to the IRS. The IRS provides a way to report illegal income and pay taxes on it. https://www.irs.gov/publications/p17 https://www.irs.gov/publications/p17 > Illegal activities. Income from illegal activities, such as money from dealing illegal drugs, must be included in your income on Form 1040, line 21, or on Schedule C or Schedule C-EZ (Form 1040) if from your self-employment activity. Does anyone pay taxes on income from illegal drugs? Probably not "street dealers", but I would suspect people who earn income from marijuana businesses that are legal in some states but illegal federally probably do pay tax on that income. Furthermore, IRS tax returns are confidential. The IRS is generally prohibited from tipping off police about reported illegal income, though there are various loopholes: https://money.cnn.com/2013/02/28/news/economy/illegal-income-tax/index.html https://money.cnn.com/2013/02/28/news/economy/illegal-income...
dmode 8y ago
I am really concerned about the rapid development of the Huawei case. Sure Huawei has issues, but which corporation doesn’t. If you are an US exec, I would limit travel to China as one can risk being arrested for frivolous reasons.
- seppin 8y ago
  If Apple execs conducted espionage on behalf of the US Government, they should be targeted. The concern is, they don't, but they will still be targeted.
  - geowwy 8y ago
    US intelligence has embedded themselves in virtually all major players in Silicon Valley. They'd be stupid not to.
  - camillomiller 8y ago
    So far the only major international espionage scandal that was proven (unless you consider Snowden a liar) was the NSA scandal, which showed how American companies were involved in an international scheme (willingly or not, it doesn’t matter) to spy on both allied nations and enemy countries. Nothing like that has ever emerged about China.
    - jmknoll 8y ago
      That’s because it isn’t a story. People are routinely arrested in China for things they share on the very-much-not-encrypted WeChat. Anything that goes through any chinese tech company can be assumed to be have been read and processed by the government.
      - camillomiller 8y ago
        So, how is this comparable to what I wrote? We are talking about China spying on foreign nations through the products sold by a national company. Has it been proven that America did that? YES, unless you choose to dismiss Snowden's revelations. Has China ever done that? NO, or at least it has never emerged. These are the facts. Is China a repressive regime controlling the digital comms of its citizens? sure thing, but what has this to do with what we were discussing above? Basic logic, damn, basic logic.
b_tterc_p 8y ago
Article implies the part about stealing tech from TMobile is well documented and already resolved in court... It feels weird to me that this wasn’t a bigger deal?
lollipopJesus 8y ago
To be honest, this case has everything to do with Huawei's background (state connected, state supported). Possible not fair competition and fear of espionage dooms Huawei whatever the case details are. BTW companies steal. All in the game.
Taniwha 8y ago
On what planet is the idea of making a robot with a mechanical finger to press phones to test them a trade secret .... (as a phone developer) it's so blooming obvious I've spent hours of meeting discussing exactly this It's only a trade secret if you think the entire rest of the world is stupid
- mmmmmmmmm 8y ago
  I think it'd be foolish for any US or Canadian citizen to travel to China right now.
- mehwoot 8y ago
  It's not the idea, its the specific technology. took measurements of parts of the robot and, in one instance, stole a piece of the robot
  - Taniwha 8y ago
    But why would anyone need to do that, you build one of these by starting with a cheap 3d printer and removing the print head, it's not a hard thing to make
    - rajacombinator 8y ago
      And the robot was probably made in China to begin with!
    - shard972 8y ago
      Well go tell the Chinese they don't actually need to steal any trade secrets or any of this, they can just make it themselves. I'm sure they will reward you handsomely for basically saving their relationship with western countries and saving so much time and effort.
      - dang 8y ago
        Please don't post unsubstantive comments to HN, and especially please don't post in the flamewar style. Double especially not for nationalistic battle. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html Edit: it looks like you've unfortunately posted a ton of unsubstantive and uncivil comments. If you keep doing that we will ban you, so could you please re-read the guidelines and fix that? You might also find these links helpful for getting an idea of the spirit of this site: https://news.ycombinator.com/newswelcome.html https://news.ycombinator.com/newswelcome.html https://news.ycombinator.com/hackernews.html https://news.ycombinator.com/hackernews.html http://www.paulgraham.com/hackernews.html http://www.paulgraham.com/hackernews.html http://www.paulgraham.com/trolls.html http://www.paulgraham.com/trolls.html
deleted 8y ago
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walrus01 8y ago
It is well known in the optical networking space that Huawei stolen the entirety of Nortel's DWDM proprietary data and research, and used it to build their own dwdm platform product line.
- effie 8y ago
  I wonder what Nortel's management and Canada's national security did to prevent that from happenning.
product50 8y ago
To commenters in this thread explaining that this is unfair (since almost all countries including US did it at some point of time), the main issue is that USA is powerful enough to do something about it. They can rally up support from their allies and keep Chinese companies from gaining any international adoption. Look at how they got Meng from Huawei arrested - it was almost unreal. This is how the world works today.
- make3 8y ago
  the quantity matters, and it's very clear that China did it a lot more. Also, Meng got arrested because we are in a state of law and she broke the law, not because some despot chose to
  - danudey 8y ago
    Technically, she got arrested because the UZS is of the opinion that she broke one of their laws. I'd wager she'd get released because Trump has suggested that the move is (or could be used for) political leverage (whether that's true or not), or because Canada doesn't have the same laws and so we might not extradite.
    - deleted 8y ago
      [deleted]
  - luckylion 8y ago
    Are you sure? The NSA runs a global surveillance program, monitoring/copying most of the internet traffic, and industrial espionage (against all non-US states & companies, allies or not) is a stated goal of this program. I don't know how well-funded the chinese IP theft program is, but I doubt it's much larger.
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    - misja 8y ago
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zavi 8y ago
China needs to take down its firewall or be shut out from the international markets. Blocking foreign web traffic in the age of digital commerce is blatant protectionism and WTO rules should be updated to prohibit such practice.
pishpash 8y ago
Blah blah blah, Trump has eyes set on bringing down China's leading industries for his decoupling doctrine, so anything goes. The specifics don't even matter. If you're a rat chasing specific charges you're already missing the forest for the trees.
kw71 8y ago
Does anyone remember if HP was punished for allowing a reseller to send millions of dollars of computers to Iran? I also saw HP logos on the monitors during footage of a North Korean missile test.
- casefields 8y ago
  "HP today announced a resolution of a U.S. Department of Justice (DOJ) and U.S. Securities and Exchange Commission (SEC) investigation of potential violations of the Foreign Corrupt Practices Act (FCPA). HP will pay approximately $108 million to these two U.S. government agencies. HP also has agreed to undertake certain compliance, reporting and cooperation obligations." https://www8.hp.com/us/en/hp-news/press-release.html?id=1624050 https://www8.hp.com/us/en/hp-news/press-release.html?id=1624...
  - thewileyone 8y ago
    And no HP exec was arrested.
dgzl 8y ago
In a Data Structures class a few years ago, during a review for our upcoming exam, the professor had to abruptly leave the room... I forget why. While they were gone, a Chinese student runs up to the podium and grabs the papers the professor was reading from and takes it back to their large friend group. When the professor returned, they didn't have their notes (I think it was a previous year exam). Feeling uncomfortable, the professor was unable to get the thief to confess, and class was over. About one day before the exam, a friend of mine said he was offered the texts and it had circulated to pretty much anyone who wanted it.
- ahelwer 8y ago
  What the fuck is the relevance of this story? We're just sharing tales of Chinese people misbehaving now? People in here need to do some serious soul-searching about their attitude toward 1.3 billion people. The transparent racism that pops up on every thread about China stealing trade secrets is embarrassing.
  - dgzl 8y ago
    Excuse me? I'm not being racist, the friend of mine in the story was also a Chinese guy. From what I understand, at my University there was a pretty strong culture among Chinese students to share code and homeworks. I even remember my old teacher telling me they caught a Chinese grad student who ran a business outsourcing undergrad CS homework to code-shops back in China. I don't see how this is racist, it's just observation. I'm not sure how you're confused about relevance either.
    - jessaustin 8y ago
      Relevance? TFA is about an executive arrested because her firm is accused of selling telecom equipment to Iran. TFA also mentions that the firm is also accused of copying the design of a product-testing robot. Your charming anecdote is about some student stealing class notes from a professor. What links the executive and the student? They're both Chinese! That is racist. You probably don't see that, but only because your racism makes you less rational.
kmlx 8y ago
you already know how it is with the US Gov: free markets are great unless we lose, in which case free markets go out the window and we start going after your relatives. hopefully China will not drop to that level, but we've already seen the nationalists arresting Canadian citizens. let's just hope Tim Cook doesn't have any relatives travelling to China.
- aritmo 8y ago
  That's the sad truth. No principles, just abusing the power of being superpower.
CamTin 8y ago
Remember that the laws these supposedly insidious foreigners are accused of breaking are in the same moral category as the ones your beloved hacker heroes rail against. Is this a China vs US dispute, or a war by capital against people, with one of the weapons being a magical spell that turns knowledge into property that they can own and profit from?
thewileyone 8y ago
Banks trade with sanctioned countries and only get slapped with large fines. No bank officer has been arrested in trades with Iran or any other sanctioned country.

336 points by ericzawo 8y ago

Speaking as a Canadian, this is already old news for us. There have been lively debates over on /r/canada, which went very one-sided (understandably) after China arrested two Canadians as leverage. [1] As someone who likes to follow geopolitics, I can't help but wonder if the timing of this extradition request was strategic. When Meng was arrested, Canada was in the middle of NAFTA/USMCA re-negotiations and our Prime Minister was publicly musing about diversifying our trade partnerships, specifically focused on engaging with China. The automatic arrest of one of China's "royals" per our extradition treaty with the US was an extremely effective way of erasing our only major leverage on that negotiation. IIRC the charge of bank fraud for business dealings in Iran was largely unrelated to Huawei's (sketchy) telco business. Kind of like how they got Al Capone on tax evasion. [1] https://www.nytimes.com/2018/12/12/world/asia/michael-spavor-canadian-detained-china.html https://www.nytimes.com/2018/12/12/world/asia/michael-spavor...

greglindahl 8y ago
This is the first release of the details of the US case. It's hard to see how a significant new release of information in the case could be "old news"?
- Hongwei 8y ago
  If you read the story, the major event is the case against Huawei CFO Wanzhou Meng. She was arrested in Vancouver per a US extradition request back in December. Most of this new article is providing background on the charges against her and then talking generally about potential cyber risks of Made-in-China silicon. Here's the Bloomberg article dated December 5th. https://www.bloomberg.com/news/articles/2018-12-05/huawei-cfo-arrested-in-canada-as-u-s-seeks-her-extradition https://www.bloomberg.com/news/articles/2018-12-05/huawei-cf... That has since ballooned into a huge diplomatic crisis for Canada, which has had it's citizens arrested in China and subjected to sleep deprivation interrogation and who knows what else (can't find source. read somewhere). There are active calls for our national telco's to ban Huawei's tech in our 5G infrastructure. The latest round of controversy was when Telus, one of the three major cellular providers, publicly endorsed Huawei and confirmed it will be moving ahead with their hardware purchase. So yes, for us it is old news.
  - greglindahl 8y ago
    As I said, this is the first release of the details of the charges. I'm already familiar with the history of the case, I've been following it closely.
    - Hongwei 8y ago
      Nothing in the article is substantially new, as someone who's been following this story closely. Perhaps coverage of this story for you as (presumably) an American is lighter than it has been for us up here. That's okay, and I wasn't speaking for you when I meant "us Canadians." Sorry.
      - marcell 8y ago
        My understanding (perhaps wrong) is that this was the first instance of the US issuing a formal charge. Previously, the executive was arrested and prevented from leaving Canada. The new development is that the US has specified what they are accusing this executive of, whereas previously that was not public. The significance is that before they formally charge her, there is room for face saving maneuvers. For example the US could have agreed to press lesser charges as a result of a backroom deal with China. After this new development, that is not an option for the US.
      - tivert 8y ago
        > Nothing in the article is substantially new, as someone who's been following this story closely. The stuff on the filing of formal charges is new. The (literal) date-stamp on the indictment is from Thursday: https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rIz2tT7h2.Fs/v0 https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rIz2tT7h... Since there's some redaction (and the flurry of posts on this exact same topic), I'm guessing it took until today for them to be publicly released. Another thing that's new (to me at least) is that they indicted Huawei itself, not just Mrs. Meng. A lot of the previous reporting that I read focused on her actions exclusively (probably due to extradition hearing).
2stop 8y ago
I don't understand how a charge against a company (Huawei) can result in a extradition request of an individual (the CFO at that)... So if Australia passes some tax law that Google doesn't comply... We can extradite Larry Page? Or Sergey?
eganist 8y ago
Counter-thought: the pro-diversity trade position might've been an intentional diplomatic measure to pre-empt the blowback from the arrest. "We're pro-trade; it's the PRC/Chinese who goofed."
- equalunique 8y ago
  Counter-thoughts like these are always worth considering.
jdfiugikdf823 8y ago
The whole situation is somewhat baffling. It makes sense if US considers Huawei a major future competition to US interests ( not an unreasonable assumption ) given recent arrest in Poland[0]. The main difference there though was: no royals in that case though so Huawei just fired the guy. [0]https://www.cnn.com/2019/01/11/tech/poland-huawei-exec-arrest/index.html https://www.cnn.com/2019/01/11/tech/poland-huawei-exec-arres...
FreedomToCreate 8y ago
Not true. USMCA was signed before the arrest. Approx USMCA was finalized on Nov 30 (negotiated in the months before that. Meng was arrested on Dec 1). Citations: https://www.npr.org/2018/11/30/672150010/usmca-trump-signs-new-trade-agreement-with-mexico-and-canada https://www.npr.org/2018/11/30/672150010/usmca-trump-signs-n... https://www.cnn.com/2018/12/05/tech/huawei-cfo-arrested-canada/index.html https://www.cnn.com/2018/12/05/tech/huawei-cfo-arrested-cana...
- Hongwei 8y ago
  Can't argue with that. Thanks for correcting my fuzzy memory! In the same vein, this still removes the "we can always take our business over there" card that our PM was waving around.
  - tw04 8y ago
    It seems extremely unlikely that China would refuse to do business with Canada over one persons arrest. The way they need their economy to continue growing they can't turn down a major source of revenue like Canada.
  - superioritycplx 8y ago
    The same PM was nicknamed "small potato" by Chinese.
spiritcat 8y ago
I wouldn't give our leaders that much credit.
openloop 8y ago
Seems fishy to me.
hockindusk 8y ago
Ah, yes, Canada has really been the target of Chinese hate lately some gems: 'Canada is a white supremacist foreign enemy' -- Chinese state media accelerates propaganda against Canada https://nationalpost.com/news/canada/canada-is-a-naive-american-lapdog-what-chinese-media-has-been-saying-about-us https://nationalpost.com/news/canada/canada-is-a-naive-ameri... China Just Likened Canada to a ‘Whore’ For Firing John McCallum https://www.vice.com/en_ca/article/8xynnv/china-just-likened-canada-to-a-whore-for-justin-trudeau-firing-john-mccallum?utm_source=reddit.com https://www.vice.com/en_ca/article/8xynnv/china-just-likened...
pishpash 8y ago
> There have been lively debates over on /r/canada, which went very one-sided (understandably) after China arrested two Canadians as leverage. Which just shows how much this is not a rational debate, and never will be, when nationalism is involved.
baybal2 8y ago
> The automatic arrest of one of China's "royals" per our extradition treaty with the US was an extremely effective way of erasing our only major leverage on that negotiation. That's not the only leverage, the other one is PM's extradition veto, which they seem to be so quiet about. If I were the chairman, I would've jumped out of the bed to fly to Canada and propose a trade pact the very moment Trump threw a tantrum at Canada, and EU. Sealing off US trade access to their two biggest trade allies, that's priceless. Xi's passive, paralysed by fear, stance from the start has doubled the damage China took.

sjroot 8y ago

I have to be honest — the allegations made here do not surprise me. The days of corporate espionage seem alive and well, and China’s image in the United States is taking a significant hit. It isn’t fair to the honest, hard-working Chinese nationals who want to build a life outside their homeland.

pointillistic 8y ago
But is it fair to the Americans who lost jobs, manufacturing, future, because of the 20 years of "technology transfer" by China?
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- shard972 8y ago
  It's ok, those people will be replaced soon.
- pishpash 8y ago
  Ask the American companies and the richly retired CEO's who banged on China's door in the 80's demanding to outsource there.
- Nasrudith 8y ago
  You are blaming the wrong people there. Anyone with half a brain would realize moving manufacturing into a high population country would create competitiors who now know the fundamentals of your business. And who can do the math to figure out they can claim the market taking advantage of the cheap labor and expensive markets. But Wall Street has a frothing hatred of people who think beyond the next fiscal quarter. Just look at the sheer Tesla short ratio long after it was clear they were viable.
pishpash 8y ago
Since when was China's image in the United States ever great? It's one racist yellow peril after another since the 1800's. The undertone to all of this handwringing has always been the racist assumption that the Chinese cannot possibly be capable of succeeding in a fair competition, and therefore there must be fraud involved. All said and done, people always find evidence of what they insist on believing in the first place.

panarky 8y ago

These look like serious charges: Defrauding four large banks into clearing transactions with Iran in violation of international sanctions. Conspiracy to obstruct justice by moving employees out of the United States so they could not be called as witnesses before a grand jury in Brooklyn. Conspiracy to defraud the United States by impairing, impeding, obstructing and defeating, through deceitful and dishonest means, the lawful governmental functions of an agency of the United States. Money laundering conspiracy. Conspiracy to steal trade secrets about robotics from a competitor, T-Mobile. Source: https://www.nytimes.com/2019/01/28/us/politics/meng-wanzhou-huawei-iran.html https://www.nytimes.com/2019/01/28/us/politics/meng-wanzhou-... If the charges are true, I hope Ms. Meng is extradited and prosecuted, and the company barred from operating in the US. But if this is just a bargaining chip to be exchanged for a few worthless face-saving trade deal "wins" for this administration, it will be disgrace.

conover 8y ago
The actual indictment: https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rIz2tT7h2.Fs/v0 https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rIz2tT7h... (PDF Warning) Wire fraud is really serious. It looks like the government intends on going the full distance in this case.
- panarky 8y ago
  It's notable that some of the evidence against Ms. Meng consists of "an electronic device that contained a file in unallocated space -- indicating that the file may have been deleted" (page 8 of the indictment). Did authorities seize and image her devices at JFK?
  - conover 8y ago
    I noticed that as well. I am super curious about how they obtained that information. I assume it will come out at trial, if it gets that far.
nostromo 8y ago
> But if this is just a bargaining chip to be exchanged for a few worthless face-saving trade deal "wins" for this administration, it will be disgrace. The indictment spans more than a decade; this definitely predates the current administration.

bitxbit 8y ago

It boggles my mind why the Chinese choose to take on nefarious endeavors when they are already ahead.

MichaelApproved 8y ago
It's not like they started after they got ahead. Nefarious tactics are a large part of how they got ahead.
- bitxbit 8y ago
  They’ve been ahead for awhile now, at least a decade in some areas. This is akin to the Warriors getting caught cheating every other game.
  - glitchc 8y ago
    Not sure if they’re ahead in any area exactly. Do you have specifics?
    - arwhatever 8y ago
      Consumer drone technology. :-)
      - glitchc 8y ago
        Indeed. And to answer my own question: Landing on the dark side of the moon.
- seppin 8y ago
  Ask Uber how hard it is to change the culture once you're on top.
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educationdata 8y ago

In China, stealing trade secrets is called “打破技术封锁” (breaking the technical blockade). The U.S. does not even need to collect evidence through investigation. Just by reading Chinese news reports and textbooks, you will find there are lots of Chinese nationalist stories about their hero technician / scientists steal western technologies. They are literally proud of it. I heard from my Chinese friends who work in the US universities in the field of EE, CS, material, etc.. Huawei actually has personnel monitoring their university webpages. Add working project to your webpage, Huawei could call/email you the next day (in Chinese of course) if they find something they want to buy to get ahead.

baroffoos 8y ago
Sharing knowledge and advancing technology for everyone is something to be proud of. Society needs to end the practice of hoarding private knowledge.
- sovietmudkipz 8y ago
  I think the idea behind intellectual property is to encourage people to take risks associated with developing something new and profit through their innovations. If all new discoveries were the property of the state/public then there wouldn't be a high incentive to be inventive for any given individual. It's like if everyone was a farmer but everything harvested was immediately taken from the farmer. Why would any farmer put in effort to increase yield when they would not profit from their extra effort?
  - ndnxhs 8y ago
    Its unfortunate that out economical system discourages sharing and rewards those who act selfishly. If the farmers needs were taken care of, they would push to make better tech to make their lives easier and provide more food for the rest of their country.
    - sovietmudkipz 8y ago

onetimemanytime 8y ago

No doubt Huawei did this. And no doubt Trump will wipe their slate clean for a trade deal. So it sucks for Canada. US has sanctions on Iran, not China so getting around them is not considered a crime for them. Of course they will steal any technology them deem essential for their business. Bank fraud is probably lying to banks about doing business with Iran, not cheating them of money.

panarky 8y ago
It's conspiracy to commit bank fraud if you lie to a US bank to get them to clear US dollar transactions in violation of sanctions. Banks pay astronomical fines for evading sanctions. Infographic -> https://www.refinitiv.com/content/dam/gl/en/documents/infographics/fines-for-banks-that-breached-us-sanctions-infographic.pdf https://www.refinitiv.com/content/dam/gl/en/documents/infogr... And it's conspiracy to defraud the United States if you obstruct or defeat an agency of the US government. Also money laundering, wire fraud, stealing trade secrets, etc.
- onetimemanytime 8y ago
  Like I said, they do not consider it a crime. Lying to the banks was means to an end--doing business with Iran. Like if you deal drugs, you will also evade taxes.
  - EpicEng 8y ago
    >Like if you deal drugs, you will also evade taxes And if they IRS finds out they are coming after you. They don't care that the money was made illegally. Besides, these sanctions we're passed by the UN, not the US, and China is a voting member.
  - Pyxl101 8y ago
    > Like if you deal drugs, you will also evade taxes. Not necessarily. You could choose to pay taxes on that income to the IRS. The IRS provides a way to report illegal income and pay taxes on it. https://www.irs.gov/publications/p17 https://www.irs.gov/publications/p17 > Illegal activities. Income from illegal activities, such as money from dealing illegal drugs, must be included in your income on Form 1040, line 21, or on Schedule C or Schedule C-EZ (Form 1040) if from your self-employment activity. Does anyone pay taxes on income from illegal drugs? Probably not "street dealers", but I would suspect people who earn income from marijuana businesses that are legal in some states but illegal federally probably do pay tax on that income. Furthermore, IRS tax returns are confidential. The IRS is generally prohibited from tipping off police about reported illegal income, though there are various loopholes: https://money.cnn.com/2013/02/28/news/economy/illegal-income-tax/index.html https://money.cnn.com/2013/02/28/news/economy/illegal-income...

dmode 8y ago

I am really concerned about the rapid development of the Huawei case. Sure Huawei has issues, but which corporation doesn’t. If you are an US exec, I would limit travel to China as one can risk being arrested for frivolous reasons.

seppin 8y ago
If Apple execs conducted espionage on behalf of the US Government, they should be targeted. The concern is, they don't, but they will still be targeted.
- geowwy 8y ago
  US intelligence has embedded themselves in virtually all major players in Silicon Valley. They'd be stupid not to.
- camillomiller 8y ago
  So far the only major international espionage scandal that was proven (unless you consider Snowden a liar) was the NSA scandal, which showed how American companies were involved in an international scheme (willingly or not, it doesn’t matter) to spy on both allied nations and enemy countries. Nothing like that has ever emerged about China.
  - jmknoll 8y ago
    That’s because it isn’t a story. People are routinely arrested in China for things they share on the very-much-not-encrypted WeChat. Anything that goes through any chinese tech company can be assumed to be have been read and processed by the government.
    - camillomiller 8y ago
      So, how is this comparable to what I wrote? We are talking about China spying on foreign nations through the products sold by a national company. Has it been proven that America did that? YES, unless you choose to dismiss Snowden's revelations. Has China ever done that? NO, or at least it has never emerged. These are the facts. Is China a repressive regime controlling the digital comms of its citizens? sure thing, but what has this to do with what we were discussing above? Basic logic, damn, basic logic.

b_tterc_p 8y ago

Article implies the part about stealing tech from TMobile is well documented and already resolved in court... It feels weird to me that this wasn’t a bigger deal?

lollipopJesus 8y ago

To be honest, this case has everything to do with Huawei's background (state connected, state supported). Possible not fair competition and fear of espionage dooms Huawei whatever the case details are. BTW companies steal. All in the game.

Taniwha 8y ago

On what planet is the idea of making a robot with a mechanical finger to press phones to test them a trade secret .... (as a phone developer) it's so blooming obvious I've spent hours of meeting discussing exactly this It's only a trade secret if you think the entire rest of the world is stupid

mmmmmmmmm 8y ago
I think it'd be foolish for any US or Canadian citizen to travel to China right now.
mehwoot 8y ago
It's not the idea, its the specific technology. took measurements of parts of the robot and, in one instance, stole a piece of the robot
- Taniwha 8y ago
  But why would anyone need to do that, you build one of these by starting with a cheap 3d printer and removing the print head, it's not a hard thing to make
  - rajacombinator 8y ago
    And the robot was probably made in China to begin with!
  - shard972 8y ago
    Well go tell the Chinese they don't actually need to steal any trade secrets or any of this, they can just make it themselves. I'm sure they will reward you handsomely for basically saving their relationship with western countries and saving so much time and effort.
    - dang 8y ago
      Please don't post unsubstantive comments to HN, and especially please don't post in the flamewar style. Double especially not for nationalistic battle. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html Edit: it looks like you've unfortunately posted a ton of unsubstantive and uncivil comments. If you keep doing that we will ban you, so could you please re-read the guidelines and fix that? You might also find these links helpful for getting an idea of the spirit of this site: https://news.ycombinator.com/newswelcome.html https://news.ycombinator.com/newswelcome.html https://news.ycombinator.com/hackernews.html https://news.ycombinator.com/hackernews.html http://www.paulgraham.com/hackernews.html http://www.paulgraham.com/hackernews.html http://www.paulgraham.com/trolls.html http://www.paulgraham.com/trolls.html

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walrus01 8y ago

It is well known in the optical networking space that Huawei stolen the entirety of Nortel's DWDM proprietary data and research, and used it to build their own dwdm platform product line.

effie 8y ago
I wonder what Nortel's management and Canada's national security did to prevent that from happenning.

product50 8y ago

To commenters in this thread explaining that this is unfair (since almost all countries including US did it at some point of time), the main issue is that USA is powerful enough to do something about it. They can rally up support from their allies and keep Chinese companies from gaining any international adoption. Look at how they got Meng from Huawei arrested - it was almost unreal. This is how the world works today.

make3 8y ago
the quantity matters, and it's very clear that China did it a lot more. Also, Meng got arrested because we are in a state of law and she broke the law, not because some despot chose to
- danudey 8y ago
  Technically, she got arrested because the UZS is of the opinion that she broke one of their laws. I'd wager she'd get released because Trump has suggested that the move is (or could be used for) political leverage (whether that's true or not), or because Canada doesn't have the same laws and so we might not extradite.
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- luckylion 8y ago
  Are you sure? The NSA runs a global surveillance program, monitoring/copying most of the internet traffic, and industrial espionage (against all non-US states & companies, allies or not) is a stated goal of this program. I don't know how well-funded the chinese IP theft program is, but I doubt it's much larger.
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zavi 8y ago

China needs to take down its firewall or be shut out from the international markets. Blocking foreign web traffic in the age of digital commerce is blatant protectionism and WTO rules should be updated to prohibit such practice.

pishpash 8y ago

Blah blah blah, Trump has eyes set on bringing down China's leading industries for his decoupling doctrine, so anything goes. The specifics don't even matter. If you're a rat chasing specific charges you're already missing the forest for the trees.

kw71 8y ago

Does anyone remember if HP was punished for allowing a reseller to send millions of dollars of computers to Iran? I also saw HP logos on the monitors during footage of a North Korean missile test.

casefields 8y ago
"HP today announced a resolution of a U.S. Department of Justice (DOJ) and U.S. Securities and Exchange Commission (SEC) investigation of potential violations of the Foreign Corrupt Practices Act (FCPA). HP will pay approximately $108 million to these two U.S. government agencies. HP also has agreed to undertake certain compliance, reporting and cooperation obligations." https://www8.hp.com/us/en/hp-news/press-release.html?id=1624050 https://www8.hp.com/us/en/hp-news/press-release.html?id=1624...
- thewileyone 8y ago
  And no HP exec was arrested.

dgzl 8y ago

In a Data Structures class a few years ago, during a review for our upcoming exam, the professor had to abruptly leave the room... I forget why. While they were gone, a Chinese student runs up to the podium and grabs the papers the professor was reading from and takes it back to their large friend group. When the professor returned, they didn't have their notes (I think it was a previous year exam). Feeling uncomfortable, the professor was unable to get the thief to confess, and class was over. About one day before the exam, a friend of mine said he was offered the texts and it had circulated to pretty much anyone who wanted it.

ahelwer 8y ago
What the fuck is the relevance of this story? We're just sharing tales of Chinese people misbehaving now? People in here need to do some serious soul-searching about their attitude toward 1.3 billion people. The transparent racism that pops up on every thread about China stealing trade secrets is embarrassing.
- dgzl 8y ago
  Excuse me? I'm not being racist, the friend of mine in the story was also a Chinese guy. From what I understand, at my University there was a pretty strong culture among Chinese students to share code and homeworks. I even remember my old teacher telling me they caught a Chinese grad student who ran a business outsourcing undergrad CS homework to code-shops back in China. I don't see how this is racist, it's just observation. I'm not sure how you're confused about relevance either.
  - jessaustin 8y ago
    Relevance? TFA is about an executive arrested because her firm is accused of selling telecom equipment to Iran. TFA also mentions that the firm is also accused of copying the design of a product-testing robot. Your charming anecdote is about some student stealing class notes from a professor. What links the executive and the student? They're both Chinese! That is racist. You probably don't see that, but only because your racism makes you less rational.

kmlx 8y ago

you already know how it is with the US Gov: free markets are great unless we lose, in which case free markets go out the window and we start going after your relatives. hopefully China will not drop to that level, but we've already seen the nationalists arresting Canadian citizens. let's just hope Tim Cook doesn't have any relatives travelling to China.

aritmo 8y ago
That's the sad truth. No principles, just abusing the power of being superpower.

CamTin 8y ago

Remember that the laws these supposedly insidious foreigners are accused of breaking are in the same moral category as the ones your beloved hacker heroes rail against. Is this a China vs US dispute, or a war by capital against people, with one of the weapons being a magical spell that turns knowledge into property that they can own and profit from?

thewileyone 8y ago

Banks trade with sanctioned countries and only get slapped with large fines. No bank officer has been arrested in trades with Iran or any other sanctioned country.