Huawei, a Chinese telecommunications firm, saw its Chief Financial Officer Meng Wanzhou, 46 and daughter of the founder of the company, detained and held at an airport in Canada. The December 1 arrest, puts Ms Meng in a situation that if a maximum sentence is assigned, it could be 30 years for each charge. Now that charges are built around selling telecom equipment to Iran for spy-craft purposes. There are also charges to defraud multiple financial institutions. This is all contingent on the extradition to the US.
The US prosecutors are asking to extradite Meng to face charges that she misrepresented Huawei*s relationship to a company that had transacted business in Iran despite US sanctions. The US now has 60 days to make a formal extradition request, which a Canadian judge will weigh to determine whether there is in fact a case against Meng. From 2009 to 2014, the court heard a report that Skycom attempted to sell embargoed Hewlett-Packard computer equipment to a telcom provider in Iran. According to reports, Meng used the names Cathy and Sabrina, and served on the board of Skycom between February 2008 and April 2009 which does have a connection to Huawei. One more concern is the equipment in question is said to have “backdoors” for use by government spies. the firm has denied such claims.
These allegations are also part of a wider movement by Japan and the United States that point to technology transfer and other practices by China with regards to the WTO. Japan and the US want to change the structure of the WTO and Trump now threatens to pull out. More on this evolving story in the coming weeks.
If the US does in fact arrest a Chinese national, this would take the trade war to another level and 2019 it may explode into more aggressive stances by both nations.The US has challenged China in the South China Sea – we at Classiarius think that this will be the next flashpoint.