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Huawei CFO facing extradition to US when hearing starts today

Sabrina Meng 16x9.jpg

Huawei’s CFO, Meng Wanzhou is due to begin what’s expected to be an eight-day extradition trial in Vancouver later today, nearly 10 months after she was arrested.

The hearing is expected to last eight days, during which her lawyers will argue first that she was wrongly arrested at Vancouver airport and secondly that the Canadian authorities, acting on behalf of the US Federal Bureau of Investigations (FBI), do not have a case against her.

Meng (pictured) was arrested after she stepped off Cathay Pacific flight CX838 at lunchtime on Saturday 1 December, after an 11½-hour flight from Hong Kong – the early hours of Sunday morning in China.

Her arrest was not known widely until five days later: even a senior Huawei executive learned about it only from a Canadian source on Thursday morning China time.

Meng’s father, Huawei founder and CEO Ren Zhengfei, is likely to have known soon after the arrest, not least through China’s diplomatic representation in Canada.

Reports say the Royal Canadian Mounted Police (RCMP), Canada’s federal police force, originally planned to arrest her on the plane, but instead waited until she had passed through customs.

That is the point of her lawyers’ first objection – that the RCMP carried out a covert investigation, waited until customs had searched her bags, and did not give her the opportunity to respond.

“Canadian law enforcement was at fault and so the case should be thrown out,” said an individual who has been close to the issue, but did not want to be identified. According to Capacity’s source, “they took away her phone, she wasn’t read her rights, and her belongings were searched”.

Meng was arrested and imprisoned, but later given bail. She has been living in her Vancouver house since then, with a bracelet to ensure she doesn’t stray.

But her and Huawei’s lawyers are also insisting that the RCMP, acting for the FBI, has not presented any evidence for the charges on which Meng was arrested. Since mid-December 2018 these have centred on the allegation that she was a director of Skycom, a Hong Kong company that was secretly owned by Huawei. The Reuters news agency revealed her connections to Skycom in 2013 – when her western name was Cathy Meng. (Now she uses the name Sabrina Meng.) 

Officially, she is charged with bank fraud, wire fraud and conspiracy to commit both. She denies all charges. It was alleged last year that Skycom was an intermediary used to sell Hewlett-Packard gear to Mobile Telecommunication Co of Iran in contravention of US trade sanctions, thought to be in 2010. 

This was the model used in 2011 by rival Chinese vendor ZTE to build its plan, approved by the then CEO and then CFO according to signatures on documents, to smuggle telecoms equipment to Iran against US sanctions.

That breach resulted in a fine of $1.4 billion – but only after a climb-down by ZTE, which nearly folded while it was prevented from using US-designed chips and software in its systems.

No ZTE-style documents have been leaked or officially unsealed by the US in the case against Meng. Unlike the ZTE case, Huawei has not been charged with any breach of US sanctions against Iran – only Meng is the subject of those charges.

The US separately imposes restrictions on Huawei, and has added the company to its entity list, which means US companies, US citizens, and non-US citizens who are in the US, are banned from trading with it. This has caused Huawei serious problems: in particular it is unable to use Google services, including Gmail and the Android Play Store, on the Mate 30 phone which was launched last week. 

“The [Iran] case itself is weak,” suggested Capacity’s source. “We take some encouragement from that, but we are not banking on it.”