AUS
NZ
UK
CA
USA
IND
Summary
- In 2018, Canada had arrested Huawei CFO Meng Wanzhou on a US warrant over bank fraud for misleading HSBC holdings about Huawei’s business dealings in Iran
- Since then bilateral relations between the US, China, and Canada have been strained, as prosecutors have been pressurizing Wenzhou to admit to US charges
- Huawei has been in a tussle with the US authorities over stealing of their trade secrets regarding supply of 5G equipment which could allow Chinese agencies to spy on other countries
After two years of acrimonious charges, the US prosecutors seem to be closing a deal with the lawyers of Huawei Chief Financial Officer Meng Wenzhou, who is in detention in Canada since 2018. US authorities have been trying to get Wenzhou extradited and are fighting a battle in the British Columbia court.
Wenzhou, who is the daughter of Huawei founder Ren Zhengfei, was first detained in August 2018 and then arrested in December 2018 in Canada on a warrant after the US authorities had passed an extradition request over allegations of bank fraud. Sources said Wenzhou’s lawyers have been trying to resolve the issue with the US Justice Department. The department wants Wenzhou to admit to some of the charges so that the case can be settled.
But Wenzhou has refused a deal because she believes she hasn’t done anything wrong, newspapers reported. However, if an early resolution of the controversy takes place, Canada would be truly relieved as it has been caught in the middle of the US- China tussle.
US President Donald Trump’s moves against Huawei led to added tensions between the US and China. After the US ban on 5G telecom equipment, many allies, like the UK, have barred their telecom carriers from using Huawei’s networking equipment.
Arrest and controversy
Both Huawei and Wenzhou have denied any wrongdoings on their part and outrightly deny the charges levelled by the US prosecutors. The controversy involves Iran-based Skycom Tech Co Ltd, which is Huawei’s local business partner officially. The US prosecutors alleged that it was Huawei’s unofficial subsidiary used to conceal its Iran business.
Huawei allegedly used its Iranian partner for obtaining US embargoed goods and services, and technology in Iran. Later, it allegedly transferred money through international channels using the HSBC Bank.
The negotiations between US prosecutors and Wenzhou lawyers had intensified after Joe Biden was elected as the president last month.
Charges and allegations
The Chinese technology company has been charged with stealing technology and trade secrets from six US tech firms. For this, the US and China were involved in a bitter exchange of words and mutual imposition of sanctions which hurt bilateral trade. China has termed the US's actions as highhandedness and not in the spirit of free trade.
5G controversy
The US has banned Huawei supplied 5G equipment from its networks accusing it of having security loopholes that would allow Chinese intelligence agencies to spy on foreign countries. Further, it managed to persuade few of its ally countries from using Huawei telecom equipment in their networks. This led to a massive curtailing of business opportunities for the Chinese multinational.
Finally, market experts feel that the resolution of the controversy revolving Wenzhou is unlikely to have any impact on the other charges levelled by the US against Huawei.
A possible truce in the case could also resolve the strained China-Canada relationship and help release of two Canadians who were detained in China after Wenzhou’s arrest.
