Huawei’s Chief Financial Officer Arrested in Canada

December 5, 2018 Updated: December 7, 2018

Canadian authorities have arrested Huawei’s chief financial officer on suspicion that she violated U.S. trade sanctions against Iran.

Meng Wanzhou, who is the deputy chair of Huawei’s board and daughter of company founder Ren Zhengfei, was arrested in Vancouver at the request of U.S. authorities, The Globe and Mail reported.

A court hearing has been set for Dec. 7.

According to The Globe and Mail, it is alleged that Meng attempted to evade U.S. trade sanctions against Iran.

The investigation, launched by the Justice Department in 2016, alleges that Huawei had been shipping U.S. origin products to Iran and the other countries in violation of U.S. export and sanction laws.

The aim of the Justice Department’s investigation is to prevent companies, such as Huawei and ZTE Corp. that may be answerable to the Chinese Communist Party, from gaining access into the U.S. economy amid allegations of spying on its citizens.

The investigation is being run out of the U.S. Attorney’s Office in Brooklyn, according to The Globe and Mail.

A Huawei statement said Meng, who also has gone by the English names Cathy and Sabrina, was detained when she was transferring flights in Canada.

The investigation into Huawei is similar to that which led to the near-downfall of its domestic competitor, Chinese smartphone maker ZTE.

In 2017, ZTE pleaded guilty in U.S. federal court to evading U.S. embargoes on Iran, by buying American tech parts, incorporating them into ZTE equipment, then illegally shipping them to Iran. The case was the result of a five-year federal investigation. The company paid $890 million in fines and penalties.

However, earlier this year, the United States banned American firms from selling parts and software to ZTE for seven years, a move which brought the company to its knees. Washington accused ZTE of violating an agreement on punishing employees arising out of the court case.

The ban was lifted by President Donald Trump in May after a request from the Chinese regime. As part of a new deal to lift the ban, ZTE agreed to pay $1 billion in fines, replace its entire board of directors and senior management, and to have a compliance team assembled by the U.S. Commerce Department embedded in its operations.

The arrest drew a quick reaction in Washington.

U.S. Senator Ben Sasse praised the action and said that it was “for breaking U.S. sanctions against Iran.” He added, “Sometimes Chinese aggression is explicitly state-sponsored, and sometimes it’s laundered through many of Beijing’s so-called ‘private’ sector entities.”

Reuters contributed to this report.

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