{"id":806,"date":"2018-12-09T00:58:22","date_gmt":"2018-12-09T00:58:22","guid":{"rendered":"http:\/\/ielrblog.com\/?p=806"},"modified":"2018-12-09T00:58:22","modified_gmt":"2018-12-09T00:58:22","slug":"canada-arrests-huawei-executive-on-u-s-extradition-warrant-for-sanctions-charges","status":"publish","type":"post","link":"https:\/\/ielrblog.com\/index.php\/2018\/12\/09\/canada-arrests-huawei-executive-on-u-s-extradition-warrant-for-sanctions-charges\/","title":{"rendered":"Canada Arrests Huawei Executive on U.S. Extradition Warrant for Sanctions Charges"},"content":{"rendered":"<p>On December 1, 2018, Canada arrested Meng Wanzhou, Huawei\u2019s global chief financial officer, on a U.S. extradition warrant to answer fraud charges in the U.S. District Court for the Eastern District of New York.<a href=\"#_ftn1\" name=\"_ftnref1\">[1]<\/a>During a bail hearing on December 7, 2018, John Gibb-Carsley, a lawyer with the Canadian federal Justice Department, told the court Ms. Meng committed multiple acts of fraud against financial institutions and should be denied bail.\u00a0 He told B.C. Supreme Court Justice William Ehrcke that Meng does not have meaningful connections to Canada, has enormous resources, and poses a serious flight risk, especially since each offense carries a maximum of 30 years in prison.<a href=\"#_ftn2\" name=\"_ftnref2\">[2]<\/a><\/p>\n<p>In particular Gibb-Carlsey said Ms. Meng had \u201cdirect involvement\u201d with Huawei\u2019s representation to banks and tricked them into engaging in transactions that violated U.S. sanctions against Iran.<\/p>\n<p>According to Gibb-Carsley, between 2009 and 2014, Huawei used a Hong Kong company, Skycom Tech, to make Transactions in Iran and engage in business with telecom companies there, in violation of U.S. sanctions.\u00a0 U.S. banks cleared financial transactions for Huawei, inadvertently doing business with Skycom.<a href=\"#_ftn3\" name=\"_ftnref3\">[3]<\/a><\/p>\n<p>In 2013, articles by Reuters alleged Huawei used Skycom to do business in Iran and attempted to import U.S.-made computer equipment into Iran in violation of sanctions.\u00a0 When several financial institutions inquired about the Huawei-Skycom relationship, Ms. Meng arranged a meeting with an executive from one of the financial institutions.\u00a0 During the meeting, she presented PowerPoint slides in Chinese, saying that Huawei operated in Iran in strict compliance with U.S. sanctions.\u00a0 She allegedly falsely stated that Huawei had sold the shares it had held in Skycom.\u00a0 However, Mr. Gibb-Carsley said no distinction existed between Skycom and Huawei.\u00a0 Huawei secretly operated Skycom as an unofficial subsidiary.<\/p>\n<p>In this regard, Skycom employees used Huawei email addresses and made badges and a letterhead showing the Huawei logo.\u00a0 Skycom documents showed that Huawei also controlled the entity to which the company was sold in 2009 until at least 2014.<a href=\"#_ftn4\" name=\"_ftnref4\">[4]<\/a><\/p>\n<p>Gibb-Carsley said Relying on misrepresentations by Meng and other Huawei representatives, one of the banks and its U.S. subsidiary cleared more than $100 million worth of transactions concerning Skycom through the U.S. between 2010 and 2014.<a href=\"#_ftn5\" name=\"_ftnref5\">[5]<\/a><\/p>\n<p>HSBC had officials from Exiger, a monitor due to HSBC\u2019s prior sanctions and anti-money laundering violations, review its compliance.\u00a0 Exiger officials observed suspicious Iranian-connected transactions involving Huawei.\u00a0 Exiger reported them to the Justice Department.<a href=\"#_ftn6\" name=\"_ftnref6\">[6]<\/a><\/p>\n<p>With respect to bail, David Martin, counsel for Meng, said Meng has two Vancouver properties with a value of $14 million that would be available to be put up for bail.\u00a0 Violating her bail would humiliate her father who she loves.\u00a0 Her father is a former Chinese army intelligence officer and the founder of Huawei.\u00a0 Martin observed that the PowerPoint presentation made by Meng wad done in 2013, and questioned why it has taken so long to start a criminal prosecution.\u00a0 Martin continued that Meng\u2019s connections to Canada include her formerly having permanent residence status and her husband and several children having lived in Vancouver at one point.\u00a0 Martin said a number of conditions could be imposed for bail, including a curfew, the surrender of any passports, and surveillance if necessary.<a href=\"#_ftn7\" name=\"_ftnref7\">[7]<\/a><a href=\"#_ftn8\" name=\"_ftnref8\">[8]<\/a><\/p>\n<p>The bail hearing is adjourned until Monday December 10, when Martin is expected to call several witnesses to describe a program of \u201ccommunity custody\u201d that could apply to Meng is she is granted bail.<a href=\"#_ftn9\" name=\"_ftnref9\">[9]<\/a><\/p>\n<p>The case has increased uncertainty in global financial markets, producing another day of sharp losses from Asia to Wall Street.\u00a0 Worries about potential Chinese retaliation exist.<a href=\"#_ftn10\" name=\"_ftnref10\">[10]<\/a>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 On December 8, China warned Canada of severe consequences if it did not immediately release Meng, calling the case \u201cextremely nasty.\u201d<a href=\"#_ftn11\" name=\"_ftnref11\">[11]<\/a><\/p>\n<p>The <a href=\"http:\/\/The U.S. and Canada have strong extradition relations, so Meng has an uphill battle\">U.S. and Canada have strong extradition relations,<\/a> so Meng has an uphill battle<\/p>\n<p><a href=\"#_ftnref1\" name=\"_ftn1\">[1]<\/a> \u00a0\u00a0\u00a0Emily Rauhala and Anna Fifield, <em>Chinese tech executive lied to evade sanctions on Iran, U.S. charges<\/em>, Wash. Post, Dec.\u00a0 7, 2019, at A1, col. 1.<\/p>\n<p>&nbsp;<\/p>\n<p><a href=\"#_ftnref2\" name=\"_ftn2\">[2]<\/a>\u00a0\u00a0\u00a0 Reuters, <em>China warns Canada of \u2018consequences\u2019 if it fails to release Huawei CFO<\/em>, Globe &amp; Mail, Dec. 8, 2018.<\/p>\n<p><a href=\"#_ftnref3\" name=\"_ftn3\">[3]<\/a>\u00a0\u00a0\u00a0 Kate Conger, <em>Huawei Official Charged In Iran Sanctions Fraud<\/em>, N.Y. Times, Dec. 8, 2018, at A7, col. 1.<\/p>\n<p><a href=\"#_ftnref4\" name=\"_ftn4\">[4]<\/a>\u00a0\u00a0\u00a0 <em>Id.<\/em><\/p>\n<p><a href=\"#_ftnref5\" name=\"_ftn5\">[5]<\/a>\u00a0\u00a0\u00a0 Keith Fraser, <em>Huawei exec committed fraud by deceiving multiple banks<\/em>: <em>Crown<\/em>, Vancouver Sun, Dec. 8, 2018.<\/p>\n<p><a href=\"#_ftnref6\" name=\"_ftn6\">[6]<\/a> \u00a0\u00a0\u00a0Conger, <em>supra.<\/em><\/p>\n<p><a href=\"#_ftnref7\" name=\"_ftn7\">[7]<\/a>\u00a0\u00a0\u00a0 Fraser, <em>supra<\/em>.<\/p>\n<p><a href=\"#_ftnref8\" name=\"_ftn8\"><\/a><\/p>\n<p>[8]\u00a0\u00a0\u00a0 <em>Id.<\/em><\/p>\n<p><a href=\"#_ftnref9\" name=\"_ftn9\"><\/a><\/p>\n<p>[9]\u00a0\u00a0 <em>Id.<\/em><\/p>\n<p><a href=\"#_ftnref10\" name=\"_ftn10\">[10]<\/a>\u00a0 Rauhala and Anna Fifield, \u00a0<em>supra.<\/em><\/p>\n<p><a href=\"#_ftnref11\" name=\"_ftn11\">[11]<\/a>\u00a0 Reuters, <em>supra<\/em>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>On December 1, 2018, Canada arrested Meng Wanzhou, Huawei\u2019s global chief financial officer, on a U.S. extradition warrant to answer fraud charges in the U.S. District Court for the Eastern District of New York.[1]During a bail hearing on December 7, 2018, John Gibb-Carsley, a lawyer with the Canadian federal Justice Department, told the court Ms. [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[6,18,36,4],"tags":[],"class_list":{"0":"post-806","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-economic-sanctions","7":"category-entity-transparency","8":"category-extradition","9":"category-money-laundering-and-bank-secrecy","10":"entry"},"yoast_head":"<!-- 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