Subscriber Discussion

Canada Arrests Huawei CFO. She Faces US Extradition For Allegedly Violating Iran Sanctions

JH
John Honovich
Dec 06, 2018
IPVM

Note: We do not plan to cover this directly, as there is little we can add to this beyond what many mainstream publications have reported and the broader impact is yet unknown.

However, given Huawei's huge size, the fact that this is Huawei's CEO's daughter, and how angry this may make China, it could eventually have an impact on the industry.

For the China side of this, below are some social media posts from the Chinese government:

JP
John Poole
Dec 06, 2018

Yes, there is little to add by any mainstream publisher

as Ms Meng had sought a ban on the publication of details and this had been ordered by the courts. [Emphasis added.]

BBC: Huawei CFO arrest 'violates human rights', China says

 

 

JH
John Honovich
Dec 06, 2018
IPVM

As that BBC opines:

It is hard to overstate the symbolism and significance of this event. Huawei is the crown jewel of Chinese tech and Ms Meng is effectively its princess.

Even though it's still not clear what the charges against her are, this is not simply a case about the arrest of one woman, or just one company.

This arrest could materially damage the relationship between the US and China at possibly one of the most sensitive times between the two countries in their long and torrid history.

The gloves are off. Things have taken a dramatic turn for the worse.

That the PRC is now worried about human rights violation is, at best, ironic.

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JH
John Honovich
Dec 06, 2018
IPVM

A number of China watchers have speculated that China may or should retaliate by arresting a US executive of an arms manufacturer selling to Taiwan:

The justification would be that selling arms to Taiwan is just as illegal in China as selling to Iran is for the US.

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JH
John Honovich
Dec 06, 2018
IPVM

This 2013 Reuters article explains the original claims / link between Huawei, Huawei CEO and Iran:

JH
John Honovich
Dec 10, 2018
IPVM
UM
Undisclosed Manufacturer #1
Dec 10, 2018

For decades China has laughed at our laws and done whatever they wanted. They steal technology and lie even when caught red handed.

Now they know the game has changed.

I give China the finger!

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U
Undisclosed #2
Dec 10, 2018
IPVMU Certified

I give China the finger!

Just make sure it’s the pinky...

JH
John Honovich
Dec 10, 2018
IPVM

Reuters: Chinese state media distance Huawei arrest from U.S. trade talks

That's a positive sign for trade talks but an implicit admission how much China was a resolution, despite the US actions.

JH
John Honovich
Dec 11, 2018
IPVM

Update: China Global Times editor continues to talk up the risks to executives of both countries traveling to the other:

One interesting industry aspect to this: Will this impact Dahua and Hikvision's CEOs willingness to travel to the US? In years past, they regularly did.

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Undisclosed #2
Dec 11, 2018
IPVMU Certified

China Global Times editor continues to talk up the risks to executives of both countries traveling to the other:

With good reason:

Canadian ex-diplomat detained in China

 

JH
John Honovich
Dec 11, 2018
IPVM

China 'detains' foreigners regularly, e.g. last month: US calls for release of young Americans trapped in China ahead of G20. The younger of the two was born in America with his connection to the PRC only being his parents. 

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Undisclosed #2
Dec 13, 2018
IPVMU Certified

Two prominent Canadians in as many days, detained for “National Security”, though may be more than just chance.

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Undisclosed #3
Dec 11, 2018

John, I hope you did not have any plans to visit China.

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UM
Undisclosed Manufacturer #1
Dec 11, 2018

Take my husband, please?

Lawyers for indicted Huawei CFO Meng Wanzhou put a new spin on an old Rodney Dangerfield joke on Tuesday when they offered to pledge both of Meng's multimillion dollar homes as well as her husband (and her children) as collateral should the executive be granted bail.

Yes, you read that right:

  • HUAWEI CFO'S LAWYER PLEDGES HUSBAND PLUS 4 OTHERS AS SURETIES

Meng's lawyer also agreed that their client would wear an ankle bracelet while free on bail.

https://www.zerohedge.com/news/2018-12-11/huawei-cfo-offers-husband-children-bail-collateral

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U
Undisclosed #2
Dec 12, 2018
IPVMU Certified

Meng sprung.

U
Undisclosed #2
Dec 12, 2018
IPVMU Certified

Meng's lawyer also agreed that their client would wear an ankle bracelet...

Yeah, now if they can just stop ten thousand Huawei engineers from typing 

http://192.168.0.1/anklet/unlatch?auth=YWRtaW46MTEK

 

JH
John Honovich
Dec 16, 2018
IPVM

Law professor with a detailed analysis of the situation: The Detention of Huawei’s CFO is Legally Justified. Why Doesn’t the U.S. Say So?, key quotes:

The Chinese government threatened both Canada and the U.S. with “grave consequences” if Meng was not immediately released from detention. Its threats have been supported and amplified by Chinese state-run media and on Chinese social media. Boycotts of Apple products and Canada Goose down coats are spreading in China. Most dramatically, a Canadian think-tank scholar and diplomat, Michael Kovrig appears to have been detained in Beijing on murky charges of endangering Chinese state security.

Meng is being charged with bank fraud, rather than violating U.S. sanctions on Iran. It is likely that Meng will be charged by the U.S. with violating the bank fraud statute, 18 U.S.C. § 1344, which criminalizes any attempt “to defraud a financial institution,” or obtain funds from a “financial institution, by means of false or fraudulent pretenses, representations, or promises.” According to reports describing the U.S. affidavit, Meng is alleged to have personally made a presentation to HSBC claiming that a company doing business with Iran was not controlled by Huawei in violation of U.S. sanctions. If Meng knowingly misled HSBC in order to get some financial benefit or support, this would likely violate the statute—a breach that carries a possible 30-year jail sentence or $1 million fine.

It is worth noting that bank fraud prosecutions are not rare in the U.S. The Justice Department’s web page is filled with press releases about numerous bank fraud convictions.

 
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Undisclosed #2
Dec 16, 2018
IPVMU Certified

Good article.

But does it even attempt to answer the question “...Why Doesn’t the U.S. Say So?”* Considering that this administration is not shy about forcefully pushing back in far less justifiable situations, it’s odd.

*Yes, I’m aware that editors write headlines, not authors, but still...

JH
John Honovich
Dec 16, 2018
IPVM

Agreed, the title is misleading, the post is really about why it is legally justified, not why the US government is not 'saying' so.

My guess, and it's just a guess is that the US judicial system is disinterested in engaging in the political PR issues and is just focused on the case / their cases generally.

JH
John Honovich
Dec 27, 2018
IPVM

Former Canadian ambassador article: We must finally see China for what it truly is - quote:

We need to understand that China behaves the way it does because it works. This is enabled by a chorus of advisers in the West who don’t seem particularly discomfited by how China treats people at home or abroad. The global consulting firm McKinsey, whose bullish line on China is avidly consumed by our own government, recently held a lavish retreat for its executives in Xinjiang, in China’s far west, ground zero for the country’s repression of its Muslim Uyghurs...

they all connect to a larger narrative that is finally taking hold, one that concedes that China is an increasingly irresponsible power and partner, one that feigns compliance with international norms only when it is convenient to do so.

JH
John Honovich
Jan 10, 2019
IPVM

China's ambassador to Canada with a stern warning for Canadians, in a recent article:

I have recently heard a word repeatedly pronounced by some Canadians: bullying. They said that by arresting two Canadian citizens as retaliation for Canada’s detention of Meng, China was bullying Canada. To those people, China’s self-defence is an offence to Canada. If someone slaps you on your left cheek, give him your right cheek, they told us. But I have never seen them doing as they said.

That's a pretty blunt message. I am curious how Canadians will take such a move.

JH
John Honovich
Jan 10, 2019
IPVM

Also, and evidently I missed this on my first scan, the same China Ambassador says 'white supremacy' is behind this:

The reason why some people are used to arrogantly adopting double standards is due to Western egotism and white supremacy.

That is quite a fascinating tactic to win over the Canadians.

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JH
John Honovich
Jan 10, 2019
IPVM

And Chinese government Global Times is doubling down on the 'white supremacy' comment:

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Undisclosed #2
Jan 10, 2019
IPVMU Certified
U
Undisclosed #2
Jan 10, 2019
IPVMU Certified

They said that by arresting two Canadian citizens as retaliation for Canada’s detention of Meng, China was bullying Canada. To those people, China’s self-defence is an offence to Canada. If someone slaps you on your left cheek, give him your right cheek, they told us. But I have never seen them doing as they said.

Isn’t that what just happened?

2 Canadians detained = 2 Cheeks with no retaliatory detentions by Canada

I have recently heard a word repeatedly pronounced by some Canadians: bullying

Although Jesus suggested turning the other cheek, he didn’t say you had to hold your tongue...

UM
Undisclosed Manufacturer #1
Jan 10, 2019

How did both Jesus and Huff Post get involved here?

U
Undisclosed #2
Jan 10, 2019
IPVMU Certified

I think the reporting here is solid; it looks like they have two different sources who are on-the-record to confirm the origin of the “cheek” statement.

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JH
John Honovich
Jan 14, 2019
IPVM

A Canadian has been sentenced to death for drug dealing inside of China, widely viewed, even on the Chinese side, as being in retaliation for Huawei's CFO's arrest. Comment from Sinocism:

there can be no doubt Beijing is using the threat of death to a Canadian citizen to interfere in Canada’s internal judicial affairs to try to get the Huawei CFO Meng released…this is so stupid on so many levels by Beijing, but this is how the Party rolls inside China and it sees no reason to act differently outside the PRC borders…

I am not sure these bully tactics are going to work in the West.

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JH
John Honovich
Jan 15, 2019
IPVM
JH
John Honovich
Jan 15, 2019
IPVM

And China criticizes Canada for this:

This is a bit surreal. Canada is one of, if not the most, polite, respectable countries in the world. If China is going to treat Canada like this, it shows their general approach...

JH
John Honovich
Jan 18, 2019
IPVM

Canada and China - who know these two would become so heated.

Latest roundChina’s envoy to Canada on Thursday warned Ottawa there would be repercussions if it banned technology firm Huawei Technologies Co Ltd from supplying equipment to Canadian 5G networks, the latest blast in a deepening bilateral dispute...

“If the Canadian government does ban Huawei from participating in the 5G network, then as for what kind of repercussion there will be, I’m not sure, but I believe there will be repercussions,” Lu said through an interpreter, urging Ottawa to “make a wise decision on this issue”.

JH
John Honovich
Jan 19, 2019
IPVM

China's Ambassador to Canada with more fuel to the fire, saying Canada's detaining of Huawei's CFO is a 'backstabbing':

“In China, we have a saying that a good friend would die for his friend, would shield the knife attack of a friend, but in this case, we feel it is completely the opposite," Mr. Lu said. “It is backstabbing.”

UM
Undisclosed Manufacturer #1
Jan 19, 2019

There is another saying in China. Do as you are told or we will arrest you. This works quite well in China, not so much in the free world. I hope China keeps on talking so more people wake up to who they really are.

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Undisclosed #2
Jan 19, 2019
IPVMU Certified
JH
John Honovich
Jan 22, 2019
IPVM

China Foreign ministry contradicts China Ambassador to Canada:

The Chinese government appears to be distancing itself from remarks made by its ambassador to Canada, saying Beijing has no plans to retaliate against Ottawa if it blocks the installation of fifth-generation cellular technology made by Huawei.

JH
John Honovich
Jan 22, 2019
IPVM
JH
John Honovich
Jan 22, 2019
IPVM

Update: US to formally seek extradition of Huawei executive Meng Wanzhou: Report

SCMP report follow-up says "China warned on Tuesday that it will take action against the United States and Canada if Washington goes ahead with a demand for the extradition of a senior Huawei executive."

JH
John Honovich
Jan 23, 2019
IPVM

Canada’s ambassador to China John McCallum says Huawei’s Meng Wanzhou has ‘strong case’ against extradition:

One, political involvement by comments from [US President] Donald Trump in her case. Two, there’s an extraterritorial aspect to her case, and three, there’s the issue of Iran sanctions which are involved in her case, and Canada does not sign on to these Iran sanctions. So I think she has some strong arguments that she can make before a judge

This has caused political debate in Canada:

The opposition Tories accused McCallum of possible “political interference” in the case and of discrediting the extradition process.

It’s a setback and an unfortunate setback. It undermines that Canada is playing this by the book

Mulroney said giving advice to a judge is completely inappropriate when the government has been saying that Meng’s extradition is up to judicial authorities.

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Undisclosed #2
Jan 24, 2019
IPVMU Certified

Seems like the (some) Canadians sympathetic to Meng and her extradition, and are just following the rule of law.

If so, why isn’t China targeting Americans?

JH
John Honovich
Jan 24, 2019
IPVM

why isn’t China targeting Americans?

China Communist Party uses bully tactics, safer to pick on weaker Canada than stronger America, even though the US is the country that 'started this' by requesting the extradition.

JH
John Honovich
Jan 26, 2019
IPVM
JH
John Honovich
Jan 24, 2019
IPVM

China government's Global Times: Canada must not extradite Meng Wanzhou:

Canada, being a henchman for the US and abiding by the so-called extradition treaty between the US and Canada, persecutes senior executives of Chinese companies regardless of international law and friendly ties with China. How can Canada be detached from the case if Meng is extradited? 

It is expected that if Meng is extradited to the US, Canada will face a severe backlash from China that puts bilateral ties in jeopardy.

JP
John Poole
Jan 28, 2019

US files criminal charges in two Huawei cases, seeks extradition of CFO Meng Wanzhou

https://www.cnbc.com/2019/01/28/us-files-extradition-request-for-huawei-cfo-meng-wanzhou.html

JP
John Poole
Jan 28, 2019

An analysis of a commentator on reddit, but I'm supposing it's pretty accurate:

2 counts of Conspiracy to Commit Bank Fraud

1 count of Conspiracy to Commit Wire Fraud

2 counts of Bank Fraud

1 count of Wire Fraud

1 count of Conspiracy to Defraud the US

2 count of Conspiracy to Violate IEEPA

2 counts of Violation of IEEPA

1 count of Money Laundering Conspiracy

1 count of Conspiracy to Obstruct Justice

Signed by 13 courts, and an open investigation of IP theft again Huawei

JH
John Honovich
Jan 29, 2019
IPVM

From the WSJ's report on indictments, the charges are quite serious:

In one of the newly unsealed indictments, the U.S. alleged Huawei, its finance chief and other employees worked over the years to deceive multiple global banks and the U.S. government about its business in Iran. The superseding indictment, returned last week, charged Huawei and two affiliates with bank fraud, violations of U.S. sanctions and conspiracy to obstruct justice related to the grand jury investigation....

Huawei offered bonuses to employees who were successful in stealing confidential information from other companies, U.S. prosecutors alleged, adding that the alleged conspiracy against T-Mobile wasn’t limited to rogue employees but a companywide endeavor.

JH
John Honovich
Jan 29, 2019
IPVM

Excerpt from the indictment detailing the US claim:

JH
John Honovich
Mar 03, 2019
IPVM

Wow, another amazing development in this case - Huawei CFO suing Canada, its border agency and police force:

A Huawei executive is suing the Canadian government, its border agency and the national police force, alleging that they detained, searched and interrogated her before informing her she was under arrest.

So inside China, the CPC can abduct anyone they want, torture them any way they desire, and tell every other country to mind their own business. But in Canada...

JH
John Honovich
Mar 24, 2019
IPVM

Huawei's CFO uses and was carrying 3 Apple products, rival to Huawei, when arrested:

When Canadian police arrested Meng Wanzhou at the behest of the U.S. on a Dec. 1 stopover at Vancouver International Airport, they seized her iPhone 7 Plus, a MacBook Air and an iPad Pro, according to a court filing Friday.

U
Undisclosed #2
Mar 24, 2019
IPVMU Certified

...they seized her iPhone 7 Plus, a MacBook Air and an iPad Pro...

JH
John Honovich
Mar 24, 2019
IPVM
U
Undisclosed #2
Sep 25, 2021
IPVMU Certified
Avatar
Daniel S-T
Sep 25, 2021

The two Michaels who were detained in China have also been released, and I believe are back in Canada now, after over 1000 days in Chinese prison. Supposedly unrelated and not a retaliatory arresting. One was recently sentenced to 11 years in prison (in China). But now that Meng is free, so are the Michaels.

JH
John Honovich
Sep 27, 2021
IPVM

This PRC State media tweet has been making the rounds. It's quite funny juxtaposed to numerous and passionate declarations that Huawei is a private company:

IPVM Image

Could you imagine a US executive saying "She also affirmed to uphold the leadership of the [Republican|Democratic party] with [Trump|Biden] at the core, always be loyal to the country..."

Also, related Dahua CEO Is Communist Party Secretary, Declares "Always Follow The Party"

JH
John Honovich
Dec 11, 2021
IPVM

Supposedly, this was over, including the 2 Canadians arrested and then released right after Huawei's CFO went back to China.

However, now China says the Canadians were not freed they are just out on bail and can be re-arrested / kidnapped:

Envoy Cong Peiwu also said Friday Canada will pay a price if it blocks Chinese telecom company Huawei from participating in the country's 5G internet network as its Five Eyes Allies, the United States, Britain, Australia and New Zealand have already done.

Canada delayed its decision on 5G out of concern for Kovrig and Spavor who were imprisoned in China for nearly three years in apparent retaliation for the RCMP's arrest of Huawei executive of Meng Wanzhou on an American extradition warrant in December 2018.

...

"The two Canadians should strictly abide by the decision on bail made by relevant Chinese courts. In case of violation, China can resume, in accordance with law, the trial of the alleged criminal acts any time while on bail," Cong said Friday when pressed for further details by The Canadian Press.

This is such a baffling approachto take. Does the PRC really want to make people around the world turn on them for such strong-arm tactics?

UM
Undisclosed Manufacturer #1
Dec 11, 2021

When Covid hit I had already decided no more trips to China for me, this just reinforces that decision. If my work wants me to go I will refuse.

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