China furious as Canada arrests Huawei executive 'over Iran sanctions-busting'

The detention of Meng Wanzhou, Huawei's chief financial officer, comes after American authorities reportedly launched an investigation into suspected Iran sanctions violations by Huawei

MENA

5 min read

The New Arab & agencies

06 December, 2018

Chinese tech giant Huawei has been under scrutiny by US intelligence officials [Getty]

China reacted furiously on Thursday after a top executive and daughter of the founder of Chinese telecom giant Huawei was arrested in Canada following a US extradition request reportedly linked to the company's alleged breach of sanctions on Iran.

The detention of Meng Wanzhou, Huawei's chief financial officer, comes after American authorities reportedly launched an investigation into suspected Iran sanctions violations by Huawei, which was already under scrutiny by US intelligence officials who deemed the company a national security threat.

US President Donald Trump pulled out of the 2015 Joint Comprehensive Plan of Action (JCPOA) in May, branding the deal to restrict Iran's nuclear work a "disaster".

Iran continues to stick to the terms of the deal, and European nations also continue to support it and engage with Iran, but sweeping new US sanctions against Iran, which came into effect on November 5, have raised fears about whether the deal can survive.

The arrest stirred tensions just as the United States and China agreed to a ceasefire in their trade spat while negotiators seek a deal within three months.

Canadian authorities said Wednesday that they have arrested the chief financial officer of China’s Huawei Technologies for possible extradition to the United States.

China demanded her immediate release, and a former Canadian envoy to China warned the case might lead to retaliation by the Chinese against American and Canadian executives.

Justice Department spokesman Ian McLeod said Meng Wanzhou was detained in Vancouver, British Columbia, on Saturday.

The arrest took place on the same day Trump met with Chinese President Xi Jinping to discuss the trade war after the close of the G-20 summit in Argentina. They agreed to a 90-day truce in an escalating trade war that is threatening world economic growth and has set global investors on edge.

Meng is a prominent member of Chinese society as deputy chairman of the board and the daughter of company founder Ren Zhengfei.

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McLeod said a publication ban had been imposed in the case and he could not provide further details. The ban was sought by Meng, who has a bail hearing Friday, he said.

The Wall Street Journal reported earlier this year that US authorities are investigating whether Chinese tech giant Huawei violated sanctions on Iran.

Huawei issued a statement saying Meng was changing flights in Canada when she was detained “on behalf of the United States of America” to face “unspecified charges” in New York.

“The company has been provided very little information regarding the charges and is not aware of any wrongdoing by Ms. Meng,” the statement said.

Huawei 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.

The Chinese Embassy in Ottawa said her human rights were violated and demanded she be freed.

“The Chinese side firmly opposes and strongly protests over such kind of actions which seriously harmed the human rights of the victim,” the statement said.

“Americans are grateful that our Canadian partners have arrested the Chief Financial Officer of a giant Chinese telecom company for breaking US sanctions against Iran” -- US Sen. Ben Sasse

A US Justice Department spokesman declined to comment.

In April, China appealed to Washington to avoid damaging business confidence following the Wall Street Journal report that U.S. authorities were investigating whether Huawei violated sanctions on Iran amid spiraling technology tensions.

A foreign ministry spokeswoman, Hua Chunying, said then that China hoped the US would refrain from taking actions that could further undermine investor confidence in the U.S. business environment and harm its domestic economy.

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

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Trump has threatened to raise tariffs on Chinese goods in response to complaints that Beijing improperly pressures foreign companies to hand over technology. That is widely seen as part of a broader effort by Washington to respond to intensifying competition with Chinese technology industries that Trump says benefit from improper subsidies and market barriers.

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

“That’s something we should be watching out for. It’s a possibility. China’s plays rough,” Mulroney said. “It’s a prominent member of their society and it’s a company that really embodies China’s quest for global recognition as a technology power.”

Mulroney said Canada should be prepared for “sustained fury” from the Chinese and said it will be portrayed in China as Canada kowtowing to Trump. He also said the Iran allegations are very damaging to Huawei and said China will push back hard.

Wenran Jiang, a senior fellow at the Institute of Asian Research at the University of British Columbia, said the Chinese will read the arrest on the same day as the Trump meeting with the Chinese leader as a planned conspiracy to do damage

“She was in transit though Vancouver. That means the intelligence agencies in Canada and the US were tracking her and planning to arrest her for some time,” he said.

He foresees a crisis in relations between the three countries if she is extradited and said any talk of free trade agreement between Canada and China would be over.

US Sen. Ben Sasse, a Republican member of the Senate Armed Services and Banking committees, said Huawei is an agent of China’s communist party and applauded Canada for the arrest.

“Americans are grateful that our Canadian partners have arrested the Chief Financial Officer of a giant Chinese telecom company for breaking US sanctions against Iran,” he said.

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