Huawei CFO to appear in Canada court as Chinese media slam arrest

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A top executive of China’s Huawei Technologies Co Ltd who is under arrest in Canada is set to appear in a Vancouver court on Friday for a bail hearing as she awaits possible extradition to the United States.

Huawei CFO Meng Wanzhou, 46, who is also the daughter of the company founder, was arrested on Dec. 1 at the request of the United States. The arrest, revealed by Canadian authorities late on Wednesday, was part of a U.S. investigation into an alleged scheme to use the global banking system to evade U.S. sanctions against Iran, people familiar with the probe told Reuters.

The news roiled global stock markets on fears the move could escalate a trade war between the United States and China after a truce was agreed on Saturday between President Donald Trump and Xi Jinping in Argentina.

U.S. probe of China’s Huawei includes bank fraud accusations.Chinese telecoms giant Huawei Technologies Co Ltd’s [HWT.UL] chief financial officer was arrested as part of a U.S. investigation of an alleged scheme to use the global banking system to evade U.S. sanctions against Iran, according to sources familiar with the probe.The United States has been looking since at least 2016 into whether Huawei Technologies Ltd violated U.S. sanctions against Iran. More recently, the probe has included the company’s use of HSBC Holdings Plc (HSBA.L) to make illegal transactions involving Iran.

Huawei CFO Meng Wanzhou, the daughter of the company’s founder, was arrested in Canada and faces extradition to the United States, sparking fears it could reignite a Sino-U.S. trade dispute and roiling global stock markets.

In 2012, HSBC paid $1.92 billion and entered a deferred prosecution agreement with the U.S. Attorney’s office in Brooklyn for violating U.S. sanctions and money-laundering laws.

An HSBC spokesperson declined to comment. HSBC is not under investigation, according to a person familiar with the matter.

Huawei also declined to comment. After news of the arrest, Huawei said it has been provided little information of the charges against Meng, adding that it was “not aware of any wrongdoing by Ms. Meng.”

A spokesman for the U.S. Attorney’s office in Brooklyn, which Reuters has reported is investigating Huawei, declined to comment.

U.S. and Asian shares tumbled as news of the arrest heightened anxiety over prospects of a collision between the world’s two largest economic powers, not just over tariffs but also over technological hegemony.

HSBC’s U.S.-listed shares (HSBC.K) initially fell as trading volume rose, dropping as much as 6 percent after Reuters reported the bank’s link to the case, and were subsequently down 4.7 percent.

Huawei is already under intense scrutiny from Washington and other western governments over its ties to the Chinese government, driven by concerns it could be used by Beijing for spying. It has been locked out of U.S. and some other markets for telecom gear, but has repeatedly insisted Beijing has no influence over it.

 

The arrest in Canada of a top Chinese technology executive for possible extradition to the United States has roiled markets and cast doubt on a recent U.S.-China trade truce. Huawei Technologies Co Ltd [HWT.UL] Chief Financial Officer Meng Wanzhou, who is also the daughter of the telecommunications company’s founder, was detained on Saturday while changing planes in Vancouver. A person familiar with the matter told Reuters she faces extradition on charges related to U.S. sanctions violations.

Chinese authorities have criticized the United States and Canada, saying they did not explain why Meng was arrested and demanded her release.

These are steps that U.S. authorities typically follow in seeking arrests and extraditions of individuals in foreign countries.

How do U.S. authorities arrange arrests in foreign countries?

Federal and state prosecutors in the United States cannot simply request that their foreign counterparts arrest and turn over an individual. Such requests must be made through the U.S. Department of Justice’s Office of International Affairs (OIA).

The OIA maintains lines of communication with authorities in other countries, and is responsible for taking the next steps leading to an arrest and an extradition.

Douglas McNabb, a Houston-based international criminal defense lawyer, said the decision to pursue charges against someone like Meng could have been made at senior U.S. government levels, “given the circumstances that she is a Chinese citizen whose father has significant authority in the state.”

How do extraditions from Canada to the United States work?

Canada is one of the more than 100 countries with which the United States has extradition treaties, obligating it to cooperate with OIA requests. These treaties vary by the offenses covered, and some exclude a nation’s own citizens or anyone facing capital punishment.

The longstanding U.S.-Canada treaty requires the offense for which extradition is sought to be a crime in both countries.

It is not clear if OIA has formally requested Meng’s extradition.

Once a request is received, a Canadian court must determine if there is sufficient evidence to support extradition and Canada’s Minister of Justice must give a formal order.

What about countries with no extradition treaty?

China, Russia and Saudi Arabia are among the nations with no U.S. extradition treaties.

If a U.S. target is in one those countries, one option for OIA is to contact Interpol to put out a so-called red notice indicating there is an outstanding arrest warrant for that person.

Red notices are not typically made public, but many countries will arrest a person on the basis of a red notice as soon as that person arrives at a border crossing or airport in a third country that does have an extradition treaty with the United States.

Meng was arrested at an airport, but Reuters has not confirmed if Canada arrested her pursuant to a red notice.

Can Meng fight extradition to the United States?

OIA requests for extradition differ by treaty but generally require U.S. authorities to document the nature of the charges and the evidence.

Defendants have typically fought extradition on the grounds that their rights in the arresting country would be violated if they were sent to the requesting country to face legal proceedings. Some previous fights have lasted for months or even years.

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