Huawei arrest risks 'deep freeze' between Canada and China: Former ambassador

Eileen GuzmanDec 07, 2018

Early in April, Reuters had reported that since at least 2016, the USA attorney's office in Brooklyn has been probing Huawei's alleged shipping of us -origin products to Iran and other countries in violation of us export and sanctions laws.

In a statement released Thursday, the Chinese Embassy in Canada protested the move as an act that "seriously harmed the human rights of the victim", referring to Meng.

A profile of Huawei's chief financial officer Meng Wanzhou is displayed on a Huawei computer at a Huawei store in Beijing, China, Thursday, Dec. 6, 2018. The company's yearly financial report says the earnings come in equal part from business inside and outside the country.

Meanwhile, news of the arrest has sparked fears on Wall Street that the trade war between the U.S. and China could escalate.

The arrest drew an immediate and severe reaction from China, which demanded Meng be released immediately. He declined to give further details, citing Meng's bail hearing on Friday.

Meng...to face unspecified charges in the Eastern District of NY, when she was transferring flights in Canada.

What could be behind it?

Huawei's affordable smartphones have made strong inroads in the developing world, but the company has faced repeated setbacks in major Western economies over security concerns.

That same month Washington barred Huawei rival ZTE Corp. from exporting United States technology in a separate case over exports to Iran and North Korea.

The Trump administration said that not only do Huawei and other Chinese firms have an unfair advantage on the world market because of government subsidies, but they are also possible national security threats from suspected spying. DoubleLine Capital CEO Jeffrey Gundlach told Reuters on Tuesday that the United States economy is "poised to weaken".

Visitors pass a Huawei marquee in Barcelona, during the Mobile World Congress a year ago. The Globe and Mail newspaper, citing law enforcement sources, reported that Meng is suspected of trying to evade United States sanctions on Iran. Authorities have suspected the company has been involved in defying sanctions on Iran since 2016, when the USA investigated Huawei's Chinese rival ZTE over similar violations.

The Chinese consulate in Vancouver has been providing her assistance, he added, declining further comment. Meng reportedly faces extradition to the US for allegedly violating American sanctions against Iran.

"The Chinese side has lodged stern representations with the U.S. and Canadian side, and urged them to immediately correct the wrongdoing and restore the personal freedom of Ms. Meng Wanzhou".

While her brother, Meng Ping, as well as her father's younger brother and his current wife all work at Huawei and related companies, none has held such senior management roles.

Despite being essentially barred from the critical U.S. market, Huawei surpassed Apple to become the world's number two smartphone maker in the second quarter of this year and has market leader Samsung in its sights.

The news comes the same day Britain's BT Group said it was removing Huawei's equipment from the core of its existing 3G and 4G mobile operations and would not use the Chinese company in central parts of the next network. But Australia and New Zealand recently banned Huawei from building 5G networks, and there are indications that other countries including Germany are revisiting the issue. These include director of the global accounting department, chief financial officer of Huawei Hong Kong and president of the accounting management department, the website said. But the company said early this year it had become the 25th largest research and development funder in Canada, thanks to partnerships with local universities.

ZTE agreed to pay a $1 billion fine and replace its entire board of directors. But American officials also worry more broadly about Chinese plans for state-led industry development they worry might erode U.S. industrial leadership.

What are the Iran sanctions?

He also responded to the idea that Meng could be found guilty in Canada for being in breach of sanctions the United States has imposed on Iran.

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