Why is the United States concerned about Huawei?
For the past several years, the U.S. government has been investigating Chinese companies that it believes are working on behalf of the Chinese Communist Party and have stolen intellectual property. Of special concern are Chinese telecom companies like Huawei that could be used to spy on U.S. citizens. Earlier this year, top U.S. intelligence officials warned Americans not to buy Huawei products. Several countries, such as Australia and New Zealand, have banned Chinese companies like Huawei and its rival ZTE from participating in their nationwide 5G cellular technology development.
Yet because it is difficult to charge the company with espionage, especially without endangering intelligence sources, federal prosecutors have instead looked for other areas where Huawei was breaking the law, according to The New York Times.
What are the U.S. criminal charges against Meng?
Details of the criminal charges against Meng are kept under seal, but based on Canadian court filings, U.S. prosecutors believe Meng lied to banks in 2013, causing them to facilitate transactions that violated sanctions on Iran.
For example, a 2013 Reuters report found that Huawei had used a subsidiary company called Skycom to do business secretly in Iran in defiance of U.S. sanctions. In late 2010, Skycom tried to sell $1.7 million worth of Hewlett-Packard computer equipment to Iranian telecom companies. At the time, global bank HSBC confronted Huawei about its ties to Skycom, as it didn’t want to violate sanctions by moving money through the United States to Iran. In a PowerPoint presentation, Meng denied the connection between Huawei and Skycom.
HSBC continued doing business with Huawei until 2015. The FBI intensified its investigation into Huawei after it found ZTE internal documents that discussed following the example of a rival company in creating “cuttoff companies” to do work in sanctioned countries like Iran and North Korea, according to the Times. Investigators believed the rival company referred to Huawei.
With help from HSBC, federal prosecutors found Huawei had used Skycom to do business in Iran from 2009 to 2014 in order to dodge international sanctions. They filed charges this August, and a federal judge signed a warrant for Meng’s arrest.
What is significant about the timing of Meng’s arrest?
Because the United States and Canada have an extradition treaty, Canadian authorities arrested Meng on Dec. 1 after she landed in Vancouver International Airport for a 12-hour layover between Hong Kong and Mexico. The arrest came the same day that President Xi and President Donald Trump met at the G-20 summit in Buenos Aires, where they agreed to a 90-day truce to negotiate a de-escalation of the trade war.