Huawei CFO Meng Wanzhou arrested in Canada, faces extradition to United States, violated US sanctions on Iran

Huawei CFO Meng Wanzhou arrested in Canada, faces extradition to United States, violated US sanctions on Iran

Dec. 7, 2018 – The Dow Jones recovered from fears the arrest of Chinese tech CFO Meng Wanzhou would accelerate a trade war between the United States and China, but the world will be watching what happens next.

The three major U.S. stock indexes were sinking this morning—adding to the pain of a tough week—as investors responded to news that the U.S. economy added fewer jobs than expected in November. Oil galloped ahead as OPEC and Russia agreed to cut output.

On Saturday, Canadian authorities apprehended the 47-year-old Huawei Technologies exec at a Vancouver airport at the behest of the U.S. government. Meng’s detainment occurred the same day President Trump met with Chinese leader Xi Jinping at the G-20 summit in Argentina.

When news of Meng’s arrest broke Thursday, the American stock market plummeted more than 700 points, but rallied to break even by day’s end.

With a bail hearing set for Friday and the U.S. seeking extradition, the drama may just be getting started.




 

A Huawei spokesperson said Meng was detained by Canadian authorities on behalf of the United States when she was transferring flights in Canada. Huawei said she faces unspecified charges in the Eastern District of New York. The Wall Street Journal reported in April that the US Justice Department was investigating whether Huawei violated US sanctions on Iran.

Meng’s father is a retired officer with the Chinese army who serves as a member of the National Congress of China’s Communist Party. Meng is his only child. She holds a master’s degree in management from Huazhong University of Science and Technology.

Huawei Technologies is one of China’s most powerful companies and is second only to Apple in international smartphone sales. The FBI and the CIA have warned the U.S. Senate Intelligence Committee that allowing Huawei to get a foothold in the United States could pose a national security risk to telecommunications infrastructure. The company scoffs at that suggestion, claiming the U.S. market is trying to limit competition.

Huawei CFO Meng Wanzhou arrested in Canada, faces extradition to United States, violated US sanctions on Iran

The Chinese company, which sells smartphones and telecommunications equipment around the world, has been facing increased scrutiny in the United States and other countries, where officials have warned of potential national security risks from using Huawei products. The United States is concerned that the Chinese government could be using Huawei’s networking technology to spy on Americans.

Huawei Technologies, remember, is not just any Chinese company. It makes cell phones and other tech products, which are used in a wide range of products in the U.S. and Europe. Huawei is also seen by some observers as instrumental in helping China’s government attain its long-term goals. Recently, it became the world’s second-largest cell-phone maker by market share.

So the arrest of its CFO isn’t just any arrest, said Peter Boockvar, chief investment officer at Bleakley Advisory Group. “Imagine for a second that the Chinese government arrested the CFO of Apple and extradited him,” Boockvar wrote in a note Thursday. “While it’s not the case, also imagine if the CFO was the child of Steve Jobs. I’ll leave my comments at that.”

Senator Ben Sasse, a Republican from Nebraska, said Americans are “grateful” to Canadian authorities for arresting Meng.

“Sometimes Chinese aggression is explicitly state-sponsored and sometimes it’s laundered through many of Beijing’s so-called ‘private’ sector entities that are in bed with Xi’s communist party,” he said.

Senator Chris Van Hollen — a Democrat from Maryland — said Chinese telecommunications companies “represent a fundamental risk to American national security.”

“We need a comprehensive plan to hold the Chinese and their state-sponsored entities accountable for gross violations of the law and threats to our security,” he said.

The Pentagon in May ordered stores on American military bases to stop selling smartphones made by Huawei and Chinese rival ZTE. And in February, top officials from the CIA, NSA, FBI and the Defense Intelligence Agency told a Senate committee that those firms’ smartphones posed a security threat to American customers.

Huawei CFO Meng Wanzhou arrested in Canada, faces extradition to United States, violated US sanctions on Iran

The Trump administration launched an extraordinary campaign, urging America’s allies to stop using Huawei telecommunications equipment because the Chinese company poses a security threat, according to the Wall Street Journal. Over the past several weeks, New Zealand and Australia have prevented telecommunications companies from using Huawei equipment for their 5G mobile networks.

UK telecom company BT (BT) said Wednesday that it would not buy equipment from the Chinese tech company for the core of its next generation wireless network. The company also said it would remove existing Huawei technology from the heart of its 4G network within two years.

Mary Greeley News
www.marygreeley.com

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https://www.cnn.com/2018/12/05/tech/huawei-cfo-arrested-canada/index.html