Photo: Reuters/Aly Song
People walk past a Huawei signboard. Photo: Reuters

The chief financial officer of Chinese telecommunications giant Huawei has been arrested in Canada and is now facing extradition to the United States in connection with alleged violations of Iran sanctions.

Meng Wanzhou, who is also the daughter of Huawei’s founder, Ren Zhengfei, was apprehended in Vancouver at the request of US law enforcement agencies, The Globe and Mail reported. Canadian authorities declined to offer further detail as to the nature of criminal charges.

US stock futures dropped sharply on the news, which has presented a new twist in sensitive trade negotiations between Washington and Beijing.

The Chinese embassy in Ottawa issued a statement condemning the action.

“China firmly opposes to and strongly protests over such kind of actions which seriously harmed the human rights of the victim. China has lodged stern representations with the US and Canada, urging them to immediately correct the wrongdoing and restore the personal liberty of Meng Wanzhou. We will closely follow the development of the issue and take all measures to resolutely protect the legitimate rights and interests of a Chinese citizen,” the statement read

Huawei said that it has not been informed as to the nature of the arrest.

“The company has been provided very little information regarding the charges and is not aware of any wrongdoing by Ms Meng. The company believes the Canadian and US legal systems will ultimately reach a just conclusion,” a spokesperson for the company said.

US Senator Marco Rubio – a cheerleader of penalties levied against Chinese telecoms firm ZTE for Iran sanctions violation – welcomed the action, citing what he described as Huawei’s threat to US national security.

“The arrest of Huawei’s CFO by the Canadian government for potential violations of Iran sanctions is welcome and I urge prompt extradition to the US,” Rubio was quoted as saying in a statement to The Globe. “Huawei has direct ties to the Chinese government and Communist Party, has long posed a serious risk to US national security, and I continue to strongly urge Canada to reconsider Huawei’s inclusion in any aspect of its 5G development, introduction, and maintenance.”

In the midst of a tentative trade truce between the US and China, the arrest of Huawei’s CFO presents one more issue of contention for leaders in both countries to deal with. Last spring, harsh penalties slapped on fellow Chinese national champion ZTE were eventually overruled by President Trump in the context of trade talks with China.

The move also comes as Huawei faces other challenges abroad this week, with UK wireless provider BT Group announcing that it will no longer use the Chinese firm’s equipment for its networks. The US, Australia and New Zealand have already issued restrictions on the use of Huawei gear in telecoms operations.

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