Huawei CFO arrested in Canada for violating Iran sanctions

Huawei CFO arrested in Canada for violating Iran sanctions

The U.S. government has largely banned the use of Huawei equipment by its agencies, and intelligence officials have warned that Beijing may have the ability to tap into the firm's equipment to spy on users.

In latest, Canadian law enforcement has arrested Huawei CFO Wanzhou Meng from Vancouver while she was changing her flights.

News of Meng's arrest provoked an immediate protest from the Chinese embassy in Canada, demanding the US and its neighbor "rectify wrongdoings" and free Meng.

Former Prime Minister of Canada Stephen Harper on the arrest of Huawei CFO Meng Wanzhou.

The arrest came days after US President Donald Trump met with Chinese President Xi Jinping to discuss the two nation's escalating trade dispute. Meng was detained in Vancouver but is facing potential extradition to the US, which had earlier opened an investigation into whether Huawei sold equipment to Iran despite sanctions on exporting there.

Jasper Lawler, head of research at London Capital Group, responded: "Traders have quickly moved out of riskier assets reflecting nerves that the arrest is likely to escalate tensions between the U.S. and China once again".

World financial markets took a fresh hit Thursday following the arrest of a senior official at Chinese telecoms equipment maker Huawei that could hinder progress in China-U.S. trade talks.

Huawei said in a statement that Meng was arrested while changing planes in Canada and that she faced unspecified charges from the Eastern District of NY.

The chances of trade peace between the U.S. and China took a blow Thursday as it emerged Huawei chief financial officer Meng Wanzhou had been held in Canada and faces extradition to the United States over alleged Iran sanctions breaches by the firm.

Founded in China more than 30 years ago, Huawei's revenue in 2018 exceeded $100billion for the first time in its history, according to CNBC.

Canada's ministry of justice confirmed the date and place of Ms Meng's arrest and added: "She is sought for extradition by the United States, and a bail hearing has been set for Friday".

U.S. markets set to drop amid Huawei arrest, trade war
Huawei is one of the world's largest telecoms companies, and is the world's second-largest smartphone manufacturer behind Samsung. The arrest, understood to have happened on December 1, is related to alleged violations of U.S. sanctions, according to reports.

On the other hand, the Chinese embassy in Canada issued a statement asking both the United States and Canada to "immediately correct the wrongdoing and restore the personal freedom of Ms. Meng Wanzhou". Huawei said it complies with all laws and rules where it operates, including export controls and sanctions of the United Nations, the USA and European Union. The Globe and Mail newspaper cited law enforcement sources as saying she is suspected of trying to evade US curbs on trade with Iran.

A source familiar with the matter told Reuters the arrest stems from Huawei Technologies Co Ltd's [HWT.UL] alleged violation of USA sanctions on Iran.

The Chinese Embassy in Canada condemned the detention of Ms Meng denying she had violated Chinese or USA laws.

Huawei itself has been increasingly on the rocks with the USA for the past year. -Chinese cease-fire in a tariff war over Beijing's technology policy.

The U.S., Australia and New Zealand have all moved to block Huawei's 5G technology.

Born in 1972, Ms Meng, who also goes by Sabrina Meng and Cathy Meng, is the chief financial officer of Huawei, the world's largest telecommunications equipment supplier and the world's No. 2 seller of mobile phones.

News of Meng's arrest provoked an immediate protest from the Chinese embassy in Canada, demanding the US and its neighbor "rectify wrongdoings" and free Meng.

Stock markets tumbled on the news, fearing renewed U.S. -China relations. As of this morning, that relationship appears very, very rocky.

"The U.S. has been telling its allies not to use Huawei products for security reasons and is likely to continue to put pressure on its allies", said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

Huawei, for its part, has denied sharing information with the Chinese government, as has ZTE.

What are the Iran sanctions?

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