Huawei CFO arrested for potential violations of US sanctions on Iran

The Chief Financial Officer (CFO) of Huawei Technologies Co., Wanzhou Meng was arrested in Vancouver in connection with potential violations by the Chinese-based company of U.S. trade sanctions on Iran, Canada’s Department of Justice said. Wanzhou Meng represents as the deputy chair woman of the company and is the daughter of the founder Ren Zhengfei. She is facing potential extradition in the Eastern District of New York, Ian McLeod, a Canada Justice Department spokesman, said in an email.

A bail hearing has been set for Friday. Her arrest on December 1st came after the U.S. Department of Justice in April opened an investigation into whether the smartphone and telecommunications giant sold equipments to Iran despite sanctions on exporting to the region.

The arrest was reported earlier by Canada’s Globe and Mail newspaper. The U.S. Justice Department declined to comment about the arrest. A spokeswoman for Canadian Prime Minister Justin Trudeau referred questions to the country’s justice department.

U.S. authorities in 2016 began voicing concerns that Huawei and others could install back doors in their equipment that would let them monitor users in the U.S. Huawei has denied those allegations. The Pentagon stopped offering Huawei’s devices in U.S. military bases citing security concerns. Best Buy Co., one of the largest electronics retailers in the U.S., also recently stopped selling Huawei products.

In August, U.S. President Donald Trump signed a bill banning the government’s use of Huawei Technologies based on security concerns. Also Australia banned the use of Huawei’s equipment for new faster 5G or fifth-generation wireless networks in the country and New Zealand last week did the same, citing national security concerns. Similar moves are under consideration in the U.K. The U.S., which believes Huawei’s equipment can be used for spying, is contacting key allies including Germany, Italy and Japan, to get them to persuade companies in their countries to avoid using equipment from Huawei, the Wall Street Journal reported last week.

“The company has been provided very little information regarding the charges and is not aware of any wrongdoing by Ms. Meng,” a spokesperson for Huawei told. “The company believes the Canadian and US legal systems will ultimately reach a just conclusion. Huawei complies with all applicable laws and regulations where it operates, including applicable export control and sanction laws and regulations of the UN, US and EU.”

“Tencent and Alibaba may be domestic champions and huge platforms in their own rights, but Huawei has become a global powerhouse,” said Neil Campling, an analyst at Mirabaud Securities Ltd. It is “5G standards that are at the heart of the wider IP debate and why the U.S. and her allies are now doing everything they can to cut to the heart of the Chinese technology IP revolution.”

In November, Huawei said the moves against it would hinder the development of 5G in the U.S. and raise prices for consumers. Still, the company’s phone business is successful. The Shenzhen-based company has overtaken Apple as the No. 2 global smartphone maker, shipping more than 52.2 million units in the third quarter, according to research analyst Gartner Inc.

In 2016, the Commerce Department sought information regarding whether Huawei was possibly sending U.S. technology to Syria and North Korea as well as Iran. The U.S. previously banned ZTE Corp., a Huawei competitor, for violating sanctions settlement over transactions with Iran and North Korea. High storm between U.S. authorities and Huawei have been soaring since 2016 and have taken a turn for the worse as the U.S.- China trade war has beaten up.