Huawei faces theft and spying probes.

Potentially complicating deal-making efforts, media reports are that federal prosecutors are preparing to pursue a criminal case against Chinese tech giant Huawei over allegations it stole trade secrets from U.S. business partners.  The reports come just one week after Poland arrested two Chinese nationals, including a Huawei employee, on suspicions of spying for the Chinese government.

Huawei’s founder, Ren Zhengfei, insists that his company has never spied or stolen from other countries or businesses.  However, on January 16, a bipartisan group of four Members of the House of Representatives introduced legislation that would ban the export of U.S. parts and components to Chinese telecommunications companies that are in violation of U.S. export control or sanctions laws (i.e. Huawei and ZTE). The legislators say the companies are effectively “intelligence gathering arms” for the Chinese government.  Similar legislation has also been introduced in the Senate. Canada and Germany are also considering bans or restrictions on business with Huawei.

Separately, the United States and Canada are increasingly concerned about Chinese retaliation for the arrest of Huawei executive Meng Wanzhou in the Vancouver Airport on December 1, 2018 over allegations she conspired to violate Iran sanctions.  On January 14, just a week after President Trump agreed to help Canadian Prime Minister Justin Trudeau seek the release of two newly detained Canadians in China, Chinese courts sentenced a Canadian man to death after a retrial for drug offenses ordered shortly after Ms. Meng’s arrest.