Huawei CFO Meng Wanzhou Arrested in Canada

The detention in Canada of Meng Wanzhou, vice president and possible heiress of the Chinese technology multinational Huawei, has added tensions this Thursday to the difficult relations between the United States and Beijing, which have just sealed a truce in their trade war.

Washington accuses the company of skipping the sanctions against Iran, while Beijing demands its release. The case exemplifies, like few others, the true terrain on which the dispute between the two superpowers develops: the fight for the control of global technological development in the coming years.

Canada announced on Wednesday the arrest in Vancouver of Meng Wanzhou, financial director of the Chinese technology brand Huawei and daughter of the founder of the company, on December 1 for allegedly violating US sanctions on Iran, Jaime Porras reports.

His arrest has been criticized by the Chinese government, which has demanded his release on Thursday, and threatens the recent commercial truce between the United States and China, although Beijing has tried to separate both issues.

Washington has already requested the extradition of Meng, but the details of the case are kept secret by court order. The Canadian newspaper The Globe and Mail, which advanced the news, assures that the arrest is linked to an alleged violation of sanctions against Tehran.

Apparently, Huawei was able to send products made on US soil to Iran, thus breaking the rules of the embargo against Tehran. In April, The Wall Street Journal already reported that the US Department of Justice had opened an investigation into this matter.

The arrest came on the same day that Trump and Chinese President Xi Jinping dined in Buenos Aires in the framework of the G20 summit and agreed to a trade truce until March 1. The White House has not clarified this Thursday if President Trump was informed of the arrest during the dinner with his Chinese counterpart.

In an interview hours later, National Security Adviser John Bolton said he knew in advance that the executive was going to be arrested, but that he did not know if Trump knew about it. “I knew this in advance, this is something we received from the Department of Justice,” according to NPR, the national public radio.

The Canadian Prime Minister, Justin Trudeau, has assured that he had been previously informed of the arrest but has insisted that “there was no political intervention in this decision since we respect the independence of the judicial system”.

The risk that the arrest of Meng Wanzhou complicate the trade war of China and the United States, after the signs that this was on the way to redirect, has caused falls in international markets. Shares in Wall Street lost more than 3% on Tuesday, and declines continued in the opening on Thursday. On Wednesday the markets were closed by the official mourning decreed by the funeral of former President George HW Bush.

The protection of the national technological industry is a priority of the Trump Administration. Washington has expressed in the past its reservations to the use of Huawei products by members of the Government, alleging the risk of espionage, for alleged links between the company and the authorities in Beijing. These invocations of national security have slowed the development of the brand in the United States.

Huawei recently became the world’s second-largest maker of smartphones, ousting Apple and only behind South Korea’s Samsung. On repeated occasions, company has denied any involvement of the regime in its operations, but a new Chinese law that requires its national companies to come to the aid of their government if so demanded by Beijing questions that independence.

The Chinese firm published on Thursday a statement in which it maintains that Meng Wanzhou was arrested when she stopped at the Vancouver airport. “The company has received very little information about the charges [against the board] and is not aware of any infringement by Ms. Meng. Huawei is confident that the legal systems of Canada and the United States will finally come to a fair conclusion. ”

The Chinese Embassy in Ottawa has posted a note on its website, requesting that the Canadian and US authorities correct any irregularities in the detention and release Meng. “We will closely monitor the development of this problem and will take all necessary measures to protect the legitimate rights and interests of Chinese citizens,” the message adds.

From Beijing, however, they tried to lower the revolutions of the confrontation so that the arrest does not derail the trade negotiations, after the pact reached final in Buenos Aires by Trump and Xi. “The negotiating teams of China and the United States maintain fluid communication and good cooperation. We hope to reach an agreement in the next 90 days, “said Ministry of Commerce spokesman Gao Feng.

Failing to know the charges that led to his arrest, the case seems similar to that of the Chinese technology ZTE, which was also the subject of an investigation in the United States for having sold technology to Iran and North Korea.

The Department of Commerce even came to prohibit this company from buying components manufactured in the United States, which put the company in serious trouble. Finally, after the order of Trump and with the aim of smoothing the trade negotiations with China, an agreement was reached that lifted that veto.

The investigation into Huawei, in which the Department of Justice has directly intervened, could be more serious not only because no one was arrested in the case of ZTE, but also because of the enormous weight and name of the woman currently in custody in Canada.

Huawei and ZTE are the two companies that registered the most patents in 2017 globally, according to data from the World Intellectual Property Organization. In 2017, Huawei had net profits of about 7,300 million dollars (about 6,400 million euros).

The judicial authorities must decide this Friday if Meng regains his bail or if he awaits the development of the judicial process in prison. The detainee herself expressed to the Canadian authorities her desire not to inform the public about her case.

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