How Huawei CFO's Arrest has Widened the U.S.-China Tech Divide

Huawei exec faces US fraud charges linked to Iran, court hears

She is the daughter of Ren Zhengfei, the founder of Huawei, a national champion at the forefront of President Xi Jinping's efforts for China to be self-sufficient in strategic technologies.

The US case against Ms Meng alleges that Huawei used Hong Kong-based Skycom, which had a presence in Tehran, to do business in the country violating sanctions.

If extradited to the United States, Meng would face charges of conspiracy to defraud multiple financial institutions, a Canadian court heard on Friday, with a maximum sentence of 30 years for each charge.

Is US trade war pressure campaign on China behind arrest of Huawei CFO?

The news of her arrest has roiled stock markets and drawn condemnation from Chinese authorities, although Trump and his top economic advisers have downplayed its importance to trade talks after the two leaders agreed to a truce.

Japan is planning to halt government purchases of equipment from China's two largest telecommunications firms, Huawei and ZTE, amid security concerns, Yomiuri Shimbun reported Friday. Congress issued a report concluding that "Huawei did not fully cooperate with the investigation and was unwilling to explain its relationship with the Chinese government or Chinese Communist Party, while credible evidence exists that it fails to comply with US laws".

The Crown attorney argued against granting Meng bail because she's so wealthy that she will easily be able to pay whatever is required and then flee.

The prosecutor opposed bail, arguing that Meng was a high flight risk with few ties to Vancouver and that her family's wealth would mean than even a multi-million-dollar surety would not weigh heavily should she breach conditions.

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He said there is incentive for Meng to leave Canada, telling the court her father's net worth is $3.2 billion and she has no meaningful connection to Canada, apart from spending two to three weeks on vacation in Vancouver every summer. The prosecutor said she is accused of fraud. The company believes the Canadian and United States legal systems will ultimately reach a just conclusion.

Huawei CFO Meng Wanzhou (L), who was arrested on an extradition warrant, appears at her B.C. Supreme Court bail hearing in a drawing in Vancouver, British Columbia, Canada December 7, 2018.

Chinese state media have argued that the United States was abusing the law to hurt Huawei's global reputation.

The US case against Meng involves Skycom, which had an office in Tehran and which Huawei has described as one of its "major local partners" in Iran.

Gibb-Carsley told the B.C. Supreme Court hearing that Reuters reported in 2013 that Huawei was operating Skycom and had attempted to import US -manufactured computer equipment into Iran in violation of sanctions.

In 2007, a management company controlled by Huawei's parent company held all of Skycom's shares.

Although there are some waivers, US Treasury Secretary Steven Mnuchin has said the US will "aggressively" target any firm or organisation "evading our sanctions".

A prosecutor disclosed that Meng was wanted by the United States for allegedly deceiving financial institutions about the relationship between Huawei and another tech company, SkyCom, based in Hong Kong, that is alleged to have sold USA -manufactured technology to Iran, in violation of US trade sanctions. He noted that some Skycom workers used Huawei email addresses and employees in Iran used a different set of stationary.

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