Huawei CFO faces U.S. fraud charges related to Iran sales

Huawei CFO faces U.S. fraud charges related to Iran sales

Kerry Wise
December 9, 2018

Freeland refused to discuss details of the case, citing the imperative of keeping politics out of a live court proceeding - one that clearly has massive geopolitical ramifications.

Japan is expected to ban government use of products made by Huawei and ZTE over cybersecurity concerns, local media reported on Friday.

Meng, 46, the daughter of Huawei's founder, appeared in a Vancouver court for a bail hearing as she awaits possible extradition to the United States in the investigation of whether Huawei violated USA sanctions against Iran.

The lawyer said Ms Meng could be a flight risk and thus should be denied bail. He alleged Huawei used a Hong Kong-based company called Skycom Tech to do business in Iran for Iranian telecom companies, breaching US and European sanctions, and that Meng led USA financial institutions to believe it had no ties to Skycom when, in fact, the company was a thinly disguised subsidiary.

Meng Wanzhou, Huawei's global chief financial officer, was arrested in Vancouver on December 1, detained on a USA warrant while en route from Hong Kong to Mexico via Canada.

Meng faces charges of fraud in the United States for allegedly misrepresenting Huawei's relationship with Hong Kong-based Skycom, according to evidence read in court on Friday.

Le said Canada's arrest of Meng while she was changing plane in Vancouver was a serious breach of her lawful rights.

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The official acknowledged that the arrest could complicate efforts to reach a broader US-China trade deal but would not necessarily damage the process.

Huawei operated Skycom as an "unofficial subsidiary", he said, adding that Skycom employees had Huawei email addresses and badges and former employees have said there was no distinction between the two companies. "They have had a good conversation with John". Canadian Prime Minister Justin Trudeau has said the country's courts acted independently and there was no political involvement in the case. The company believes the Canadian and USA legal systems will ultimately reach a just conclusion.

Meng's father, the billionaire Ren Zhengfei, founded Huawei Technologies 1987 and established it in the southern China city of Shenzhen, across the border from Hong Kong. However, that has done little to persuade governments around the world from banning its equipment.

Huawei is one of the largest telecommunications equipment and services providers in the world, recently passing Apple to become the second-biggest smartphone maker after Samsung. It argues that what's "undoubtedly true and proven is the United States is trying to do whatever it can to contain Huawei's expansion in the world simply because the company is the point man for China's competitive technology companies".

Australia and New Zealand have already said they will not use Huawei for 5G networks.

"In particular, CSIS has seen a trend of state-sponsored espionage in fields that are crucial to Canada's ability to build and sustain a prosperous, knowledge-based economy", he added.

A White House official said Trump did not know about a USA request for her extradition from Canada before he met Xi and agreed to a 90-day truce in the brewing trade war. "The United States is encouraging western allies to essentially push Huawei out of the emerging 5G network, and my personal view is that is something that western countries should be doing in terms of our own long-term security issues".