Canadian Prosecutors Accuse Huawei CFO Meng of Fraud Related to Iran Sanctions

Canadian Prosecutors Accuse Huawei CFO Meng of Fraud Related to Iran Sanctions

Meng, the chief financial officer of Huawei, was arrested Saturday while in transit at Vancouver's airport.

A senior Chinese telecoms executive committed fraud when she lied about links between Huawei and a shell company used to sell telecommunications equipment to Iran in breach of U.S. sanctions, Canadian prosecutors have told a Vancouver court.

The governments of the UK, Australia and New Zealand have moved to prevent Huawei technology being used in their future 5G mobile phone networks, following a United States drive to stop its allies from purchasing from the company.

Ms Meng allegedly misled bankers by assuring them that Skycom and Huawei were separate companies, after links between them were reported by Reuters in 2013.

She is specifically accused of lying to United States banks about the use of a covert subsidiary to sell to Iran in breach of sanctions. Several of HSBC's risk committees relied, at least in part, on this presentation and continued servicing Huawei, according to court documents.

Meng appeared in a Vancouver court on Friday for a bail hearing. A spokesperson for the Department of Justice Canada told Daily Hive Meng is being sought for extradition by the United States.

Huawei sold Skycom before the sanctions became law in the United States under president Barack Obama in 2010, he said.

In making their case for denying her bail, crown lawyers said Meng has no meaningful connections to Vancouver, and that her massive resources make the amount of her bail pledge irrelevant. This is also believed to have helped Huawei "circumvent USA sanctions by telling financial institutions that a Huawei subsidiary was a separate company".

Meng is the daughter of Huawei's founder and chief executive Ren Zhengfei.

China on Thursday demanded Canada release Meng Wanzhou.

Meng's detention in Canada came on the day of a summit at which US President Donald Trump and his Chinese counterpart Xi Jinping agreed to a truce in the escalating trade dispute opposing the two economic powerhouses.

Martin said two properties in Vancouver worth a total of $14 million could be put up for bail, and electronic monitoring and surveillance-based security could be used, although he said neither would be necessary.

It has charged that Beijing has stolen trade secrets, violated patents, hacked industrial targets and forced United States companies investing in China to hand over their technology to Chinese partners. The lawyer also proposed that Meng could be electronically monitored to ensure she does not take flight. "That number, I remember it very clearly", he said outside the courthouse. Meng also faces possible extradition from Canada.

But in a sign the case might not derail the Trump-Xi truce, Beijing protested Meng's arrest but said talks with the Trump administration would go ahead.

Influential tabloid the Global Times, published by the ruling Communist Party's People's Daily, said that the USA was "resorting to a despicable rogue's approach as it can not stop Huawei's 5G advance in the market".

"Yet Washington, in persuading and pressuring its allies to shun cooperation with Huawei, has helped erode that political trust", the English-language paper said.

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