Iran connection emerges as Canada's envoy briefs China on Huawei arrest

Erika Holt
December 8, 2018

Those findings led the launch a movement called Five Eyes, made up of the United States, Canada, the U.K., New Zealand, and Australia to monitor the Huawei situation, with Japan and Germany following along at home.

Chinese telecom giant Huawei's chief financial officer, arrested in Canada, faces United States fraud charges for allegedly lying to banks about the use of a covert subsidiary to sell to Iran in breach of sanctions, a bail hearing heard Friday.

He also outlined the Byzantine structure and what he called a constantly changing nature of US sanctions against Iran. While there is some fear that the arrest could hurt talks between the US and China to end the current trade war between the two countries, Canadian prosecutors have called Ming a flight risk and have requested that the court place her in a detention center.

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

On Thursday, former prime minister Stephen Harper told Fox Business News that while he was in power he became increasingly concerned about allowing the use of equipment from Huawei and ZTE, another Chinese telecom-equipment manufacturer. She was arrested at the Vancouver airport on Saturday after a request by the United States.

Some have noted that USA tech executives would be wise to avoid traveling to China over the next two weeks, out of concern that they might get caught up in the tug of war over Huawei. British Telecom, one of the U.K.'s largest internet providers, said this week it will not use Huawei's equipment in its 5G mobile network when it is rolled out in the United Kingdom, according to the BBC.

Huawei has become the world's biggest supplier of equipment used by phone and internet companies.

He said Meng's own personal integrity would not allow her to go against a court order, and that she would not embarrass her father, company founder Ren Zhengfei, by breaching such an order.

The Canadian prosecutor said this was untrue.

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As China pressures Canada to release her, the detention has also created domestic political fissures with opposition parties expressing frustration over a lack of information from the federal government.

Officials from major USA companies who attended the event - a scheduled meeting of the local chapter of the U.S. department of state's Overseas Security Advisory Council (OSAC) - voiced their concerns about a Chinese reprisal, two people with knowledge of the meeting said.

While it appears that Meng's arrest does not pose an immediate, existential threat to the trade truce, there are longer-term risks to the relationship.

"Obviously, Washington is resorting to a despicable rogue's approach as it can not stop Huawei's 5G advance in the market", it went on.

Mr. Trudeau and US national-security adviser John Bolton have said they both knew of the arrest plans in advance.

The case has emerged in the midst of United States moves against Chinese companies accused of stealing technology and Beijing's suspicion that Washington is trying to use politics to weaken China's continued growth.

The White House did not specify why she was detained but mentioned longstanding USA concerns over Chinese firms using stolen intellectual property and how Beijing acquires information technology. Chinese Commerce Ministry spokesman Gao Feng said China is confident it can reach a deal during the 90-day timeout.

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. Meng is also known by the names Sabrina Meng and Cathy Meng.

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