Huawei exec Meng faces United States fraud charges linked to Iran

by Garry Watts December 9, 2018, 1:03
Huawei exec Meng faces United States fraud charges linked to Iran

She faces extradition to the US.

Meng Wanzhou, the chief financial officer of telecommunications giant Huawei and daughter of its founder, faces U.S. accusations that she covered up her company's links to a firm that tried to sell equipment to Iran despite sanctions, a Canadian prosecutor has said, arguing against giving her bail while she awaits extradition.

The arrest of a top-ranking officer of one of China's leading tech companies on charges of technology theft and misuse has given a new twist to the trade and technology war between Washington and Beijing, even as the company ran into trouble in other countries - mainly Japan, which banned its government staff from buying Huawei devices, and the United Kingdom, which made the firm submit to special security norms to continue to operate.

China's foreign ministry called on Canada to immediately release Huawei Technologies Co.

It "ignored the law" and was "unreasonable", it said.

After almost six hours of arguments and counter-arguments, no decision was reached and the hearing was adjourned until Monday.

Should a judge agree to extradite Meng, she would have multiple chances to appeal the decision.

She is specifically accused of lying to a United States bank, identified by her lawyer as "Hong Kong Bank", about the use of a covert subsidiary to sell to Iran in breach of sanctions.

The US case against Ms Meng alleges that Huawei used Hong Kong-based Skycom, which had a presence in Tehran, to do business in the country violating sanctions.

SkyCom's alleged sanctions breaches occurred from 2009 to 2014, according to AFP.

Meng had been a member of SkyCom's board a decade ago, but the company was later sold, said her lawyer David Martin. The company has said it complies with all applicable export control and sanctions laws and other regulations.

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He suggested that Meng has shown a pattern of avoiding the USA since becoming aware of the investigation into the matter, has no ties to Canada and has access to vast wealth and connections - and thus poses a flight risk.

Huawei said in a Friday statement that it "will continue to follow the bail hearing" next week, expressing "every confidence that the Canadian and USA legal systems will reach the right conclusion".

The Crown attorney argued against granting Meng bail because she's so wealthy that she will easily be able to pay whatever is required and then flee.

Ms Meng was arrested on December 1 as she transited through Vancouver on her way to Mexico, coinciding with United States president Donald Trump's meeting his Chinese counterpart Xi Jinping at the G20 summit in Argentina that culminated in a temporary detente to the trade war between the world's two largest economies.

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 world's top two economies have exchanged steep tariffs on more than US$300 billion in total two-way trade, locking them in a conflict that has begun to eat into profits.

The companies all declined to comment or did not immediately respond to requests for comment.

Her appearance at the British Columbia Supreme Court in Vancouver is a prelude to an extradition process that could take months.

An editorial from the state-run Global Times says, among other things, that the U.S. is acting like a "despicable rogue" and that the arrest - which is ostensibly related to a suspicion of violating Iran trade sanctions - is a way for the USA to kept Huawei's growth in check.

Officials from major U.S. companies who attended the event - a scheduled meeting of the local chapter of the USA department of state's Overseas Security Advisory Council (OSAC) - voiced their concerns about a Chinese reprisal, two people with knowledge of the meeting said. Martin identified the firm as HSBC Holdings Plc, but he disputed the USA allegation that Meng misrepresented anything to that financial institution.

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