Canada to resume Huawei hearing - Mobile World Live

Canada to resume Huawei hearing

10 DEC 2018

A Canadian court is today set to decide the next step following its arrest of Meng Wanzhou, Huawei’s CFO, having heard opposing arguments as to whether to release her on bail.

The arrest was made at the request of the US authorities following accusations the executive misled banks about Huawei’s relationship with a company operating in Iran. This put them at risk of violating US sanctions.

Reuters reported the prosecutor argued Meng (pictured, below) was a “high flight risk with few ties to Vancouver”. Her family’s wealth (she is the daughter of Huawei founder Ren Zhengfei) would mean even a multi-million dollar bond would “not weigh heavily”.

In her defence, it was argued her public position meant it was unlikely she would breach terms due to the negative light this would cast on her father. It was also noted that she has health issues, having been treated for hypertension after being detained, and owns property in Canada worth millions of dollars.

The US has 60 days in which to make a formal extradition request, with a Canadian judge then determining if the case is strong enough. The final decision then falls to Canada’s justice minister.

News agency Xinhua reported China has summoned the US ambassador in Beijing to protest the arrest, stating the action “severely violates Chinese citizens’ legitimate rights and interests”.

Iran sanctions
At the heart of the case is Huawei’s relationship with Skycom Tech, which Huawei has described as one of its “major local partners” in Iran. Reuters reported Huawei used Skycom Tech’s office to provide network infrastructure to “several major telecommunications companies” in the country.

Court papers said an investigation by US authorities found Skycom Tech had been operated as an “unofficial subsidiary” to conduct Huawei business in Iran. The company was also previously linked with an effort to sell embargoed HP computer equipment to an Iranian operator.

“Misrepresentations” over the relationship made to banks which provide services to Huawei put the finance houses at risk of breaching trade sanctions. Reuters said the probe centred on whether Huawei had used HSBC to conduct illegal transactions, although HSBC itself is not under investigation.

Huawei’s current predicament has similarities with the US’ pursuit of ZTE over its breach of trade sanctions related to Iran (and subsequent actions after it was caught). This led to action which saw ZTE essentially put its business on hold, after US companies were prohibited from doing business with it.

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Steve works across all of Mobile World Live’s channels and played a lead role in the launch and ongoing success of our apps and devices services. He has been a journalist...More

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