Huawei Restrictions Sets Back China's Chipmaking, 5G Ambitions
The chief financial officer of Huawei Technologies Co., fighting extradition to the U.S., gets her first shot at release this week in a case that’s triggered an unprecedented diplomatic tussle between the U.S., China and Canada.
On Wednesday, the Supreme Court of British Columbia is set to release a decision on whether Meng Wanzhou’s case meets a key threshold of Canada’s extradition law. If Associate Chief Justice Heather Holmes rules that it fails to meet that test, Meng could be released from house arrest in Vancouver. If not, extradition proceedings will continue.
The case was triggered when Meng was arrested on a U.S. handover request in December 2018 during a routine stopover at Vancouver airport, a city where she owns two homes and often spent summer holidays. The fallout has since spanned three countries.
Meng, the eldest daughter of Huawei’s billionaire founder, Ren Zhengfei, has become the highest profile target of a broader U.S. effort to contain China and its largest technology company, which Washington sees as a national security threat.
China has accused Canada of abetting “a political persecution” against a national champion. In the weeks after her arrest, China put two Canadians -- Michael Spavor and Michael Kovrig -- in jail, halted billions of dollars in Canadian imports and put two other Canadians on death row, plunging China-Canada relations into their darkest period in decades. U.S. President Donald Trump muddied the legal waters further when he indicated early on that he might try to intervene in her case to boost a China trade deal.
Canadian Prime Minister Justin Trudeau -- caught between his country’s two biggest trading partners -- has resisted any such attempt to interfere in the high-stakes proceedings, saying the rule of law will govern Meng’s case.
“Canada has an independent judicial system that functions without interference or override by politicians,” Trudeau said last week in response to comments by the Chinese ambassador that Meng’s case was the biggest thorn in Canada-China relations. “China doesn’t work quite the same way and doesn’t seem to understand that we do have an independent judiciary.”
China’s foreign ministry didn’t respond to a request for comment.
Meng, 48, faces tough odds: of the 798 U.S. extradition requests received since 2008, Canada has refused or discharged only eight cases, or one per cent, according to Canada’s Department of Justice.
Whether she goes free or continues her battle against U.S. extradition, the ruling is likely to further escalate the fight between Washington and Beijing, increasingly at loggerheads over everything from the coronavirus pandemic to the status of Taiwan and Hong Kong to trade and investment.
Huawei continues to play a central role in those tensions. Earlier this month, the Commerce Department barred chipmakers using American equipment from supplying Huawei without U.S. government approval, closing a loophole in an effort to cut the Chinese company off from essential supplies used in its phones and networking gear. The move drew condemnation from Beijing and warnings from Huawei’s rotating chairman, Guo Ping, that the latest U.S. curbs on its business would cause the whole industry to “pay a terrible price.”
The U.S. government has lobbied its allies, including Canada, to ban Huawei from next-generation 5G networks, saying its equipment would make such infrastructure vulnerable to spying by the Chinese government. Despite that, the U.K. said in January it would allow Huawei a limited role. But in recent days, British media have reported the government is backtracking and preparing to end Huawei’s presence by 2023.
Trudeau has been stalling on Canada’s decision with the fates of Spavor and Kovrig hanging in the balance. The two detainees have been confined for more than 500 days without access to lawyers. In contrast, Meng was photographed by CBC News on Saturday as she posed with nearly a dozen colleagues and friends -- social distancing rules to fight the virus notwithstanding -- displaying victory signs in front of the courthouse.
The pursuit of Meng by U.S. authorities predates the Trump administration: officials were building a case against her since at least 2013, according to court documents in her case. Central to the case are allegations that Meng committed fraud by lying to HSBC Holdings Plc and tricking the bank into conducting Iran-related transactions in breach of U.S. sanctions.
Wednesday’s ruling will focus on whether the case meets the so-called double criminality test: would Meng’s alleged crime have also been a crime in Canada?
Her defense has argued that the U.S. case is, in reality, a sanctions-violations complaint framed as fraud in order to make it easier to extradite her. Had Meng’s alleged conduct taken place in Canada, the transactions by HSBC wouldn’t violate any Canadian sanctions, they say. The U.S. bank and wire fraud charges carry a maximum term of 20 years in prison on conviction.
If the ruling goes against her, Meng’s next court hearings are scheduled for June and are set to continue to at least the end of the year. Appeals could lengthen the process for years longer.