Canada Arrests Huawei Executive; China Demands Her Immediate Release

Anna Jefferson
December 7, 2018

"Recently, our corporate CFO, Ms. Meng Wanzhou, was provisionally detained by the Canadian Authorities on behalf of the United States of America, which seeks the extradition of Ms. Meng Wanzhou to face unspecified charges in the Eastern District of NY, when she was transferring flights in Canada", the statement reads.

A month later, Washington and Beijing reached a deal that would strike ZTE from the sanctions list - just days after China reportedly offered to ramp up purchases of American goods to help cut the yawning trade imbalance with the US.

The Chinese Embassy in Ottawa said Meng broke no USA or Canadian laws and demanded Canada "immediately correct the mistake" and release her.

Chinese foreign-ministry spokesman Geng Shuang told reporters Thursday that his government wants Canadian officials to reveal their reasoning.

In the short run, the arrest of Huawei's chief financial officer heightened skepticism about the trade truce that Presidents Donald Trump and Xi Jinping reached last weekend in Buenos Aires, Argentina.

Meanwhile, the substantially more independent South China Morning Post reported today that Meng and her father recently told Huawei employees that strict compliance with regulations was sometimes not financially feasible and could be avoided.

Huawei, which overtook Apple as the world's number two smartphone maker this year, said it was unaware of any wrongdoing by Meng and was provided "very little information" about the charges.

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Huawei Technologies Ltd., the biggest global supplier of network gear used by phone and Internet companies, has previously been the target of USA security concerns. Huawei has said it complies with all laws and rules where it operates, including export controls and sanctions of the United Nations, the US and European Union. Huawei has released a statement saying she is facing extradition to the Eastern District of NY. US authorities seized a laptop that contained a "treasure trove" of evidence of ZTE's illegal business in Iran, one of the sources said.

The privately held company, based in southern China's tech hub of Shenzhen near Hong Kong, is the world's largest supplier of network gear used by phone and internet companies. Chinese technology has been a particular bugbear for the USA president, who has justified imposing tariffs on Chinese imports with allegations of intellectual property theft by Chinese companies. The arrest has been made by Canadian law enforcement at the request of the U.S. over violating the Iran sanctions.

Sasse said in a statement that China was "working creatively to undermine our national security interests, and the United States and our allies can't sit on the sidelines".

Meng's bio on the company website says she joined in 1993 and held various positions across the company, including director of worldwide accounting and CFO of Huawei Hong Kong. The Wall Street Journal reported in April that the US Justice Department was investigating whether Huawei violated US sanctions on Iran.

"This is something that we get from the Justice Department", he said.

In a filing with the agency, Huawei said the defence Bill shouldn't apply to disbursements of the communications subsidy.

The Chinese Embassy in Canada condemned the detention of Ms Meng denying she had violated Chinese or United States laws.

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Following the report, the USA eventually banned Huawei from bidding for US government contracts.

CNN, quoting an unnamed official, said that the United States saw the arrest as providing leverage in trade talks. Unlike other big Chinese technology firms, it does much of its business overseas and is a market leader in many countries across Europe, Asia and Africa.

What are the concerns with Huawei?

David Mulroney, a former Canadian ambassador to China, said US and Canadian business executives could face reprisals in China.

Nevertheless, Huawei is allowed to operate in Canada and in a September interview with the Globe and Mail, Scott Jones, head of Canadian Centre for Cyber Security, said Ottawa is confident sufficient safeguards exist to deal with the risks of telecommunications hacking or spying by China.

ZTE agreed to pay a $1 billion fine and replace its entire board of directors.

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