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Thursday
Dec062018

Canada arrests Huawei CFO Meng Wanzhou for alleged U.S. sanctions violations

Huawei CFO Meng Wanzhou (Image courtesy of Huawei)The chief financial officer of China’s Huawei Technologies was arrested in Canada last weekend and now faces extradition to the United States.

Meng Wanzhou was detained in Vancouver on December 1, the Canadian Justice Department said Wednesday.

Meng -- who's also known as Sabrina Meng and Cathy Meng -- is the daughter of Huawei founder Ren Zhengfei.

She also serves as deputy chair of Huawei's board.

Her arrest came at the request of American law enforcement authorities.

She faces a bail hearing Friday.

The Wall Street Journal reported in April that the U.S. Justice Department was investigating whether Huawei violated U.S. sanctions against Iran.

Huawei is the world’s largest maker of cellular-tower electronics and other telecommunications equipment. It's based in Shenzhen in southern China, near Hong Kong.

Huawei told Canada's Globe and Mail newspaper that Meng faces “unspecified charges in the Eastern District of New York” and that she was arrested when she was transferring flights in Canada.

China said Wednesday through its embassy in Ottawa that her detention could be a human rights abuse and she should be released.

In early 2017, another Chinese telecomm equipment maker, ZTE, settled criminal and civil charges with the DOJ and other U.S. agencies.

ZTE shipped dual-use equipment to Iran for six years and lied to cover up the trade offenses. The company paid $892 million in U.S. penalties.

But a year later the U.S. Commerce Department hit ZTE with a seven-year "denial of export privileges" for lying about its compliance with the terms of the 2017 settlement.

The export denial caused ZTE to shut down its production in China.

ZTE and the Commerce Department worked out a settlement in June this year. ZTE paid $1 billion in additional penalties, put $400 million in escrow, and accepted a U.S.-appointed compliance department.

At Huawei, Meng, 46, became CFO in 2011. She started working at the company in 1993 in the accounting department.

She was seen as a likely successor to her father, the current chairman.

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Richard L. Cassin is the publisher and editor of the FCPA Blog.