What just happened? To say Huawei has a strained relationship with the US government is an understatement, but things have just got a lot worse. The company’s chief financial officer, Meng Wanzhou, has been arrested in Vancouver, Canada, at the request of the United States.
It’s claimed that Meng, the daughter of Huawei founder Ren Zhengfei, violated sanctions against Iran. Techcrunch reports that she faces unspecified charges in the Eastern District of New York, where she had transferred flights on her way to Canada. She was arrested on December 1 and faces a bail hearing tomorrow.
This isn’t the first time a Chinese company has faced consequences for allegedly selling to Iran. ZTE was almost brought to ruin after the Department of Commerce banned all US businesses from selling components to the Chinese manufacturer for seven years in April. The firm had to pay $1 billion as part of an agreement to remove the restrictions.
Details of Meng’s alleged wrongdoings are unclear, but it could be linked to her time on the board of Hong Kong-based Skycom Tech Co Ltd. A 2013 Reuters report revealed the company tried to sell HP equipment to Iran in late 2010, and that it had close ties to Huawei.
Associated Press reports that China has demanded Meng’s release. The Chinese Embassy in Ottawa said Meng broke no U.S. or Canadian laws and demanded Canada “immediately correct the mistake.”
“The Chinese side expresses firm opposition and strongly protests this serious violation of human rights,” said the embassy, in a statement.
The incident arrived soon after the US asked its allies not to use Huawei equipment, which the government has long seen as a security risk. In August, President Trump signed the Defense Authorization Act, which bans US government agencies and contractors from using certain tech from Huawei and other Chinese companies.
With China and the US recently agreeing to suspend new trade tariffs, it will be interesting to see how this development affects the trade war. It’s already led to calls for Chinese consumers to boycott Apple products in favor of Huawei phones.
Responding to Meng’s arrest, Huawei said:
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 New York, when she was transferring flights in Canada.
The company has been provided very little information regarding the charges and is not aware of any wrongdoing by Ms. Meng. The company believes the Canadian and US legal systems will ultimately reach a just conclusion.
Huawei complies with all applicable laws and regulations where it operates, including applicable export control and sanction laws and regulations of the UN, US and EU.