For Huawei, another week of bad headlines means the company is facing trouble on a global scale

Key Points
  • A Huawei executive was arrested in Poland on allegations of spying this week, and exports of Huawei telecom equipment have been halted out of California.
  • The events come on top of the controversial arrest of Huawei's CFO in Canada in December.
  • Experts say the U.S. government will continue putting pressure on the company over what the intelligence community views as intractable supply-chain issues.
A saleswoman serves customers at a Huawei shop in Beijing, China, December 12, 2018.
Jason Lee | Reuters

It was another bad week for Huawei: A public relations executive was arrested on spying charges in Poland on 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.

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 call 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, such as Apple, may be perceived among Chinese consumers.

Here are the three big cases involving Huawei this week and what they mean for the company:

Arrest in Poland

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.

Why the US thinks Huawei has been a massive national security threat for years
Why the US thinks Huawei is a massive national security threat

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 along with a Polish government information technology official.

Polish law enforcement arrested the Huawei executive alleging that he colluded with a local official to commit espionage. Polish officials have said that the charges relate to the individual's actions and not those of Huawei. The Chinese firm also denies involvement.

Polish authorities also said they are reviewing the country's use of Huawei telecommunications equipment.

Equipment in California

Huawei's research and development company, Santa Clara, California-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 multipronged effort "to ratchet up the pressure on China," said Tom Kellermann, chief cybersecurity officer of cybersecurity company Carbon Black and a former top cybersecurity official for The World Bank. "[The U.S. government's] 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, have led to bans in several countries of Huawei's telecom and 5G equipment, including the U.S., Japan, India and Australia.

CFO in Canada

The U.S. has until the end of January to file a formal extradition request in the highly controversial arrest of Meng Wanzhou, Huawei's chief financial officer.

In response to her arrest, China has reportedly arrested at least 13 Canadians working in China 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 is an example of "double standards" and "white supremacy."

Huawei still stealing Apple's share in China, says NYTimes' Ed Lee
Huawei still stealing Apple's share in China, says NYTimes' Ed Lee

Correction: This story has been updated to clarify the nature of the charges against the Huawei executive in Poland.