Meng Wanzhou, the chief financial officer of China’s Huawei, was arrested in Vancouver, and there are plans to extradite her to the U.S. Huawei recently passed Apple to become the second-biggest smartphone maker in the world, after Samsung, and is one of China’s largest telecommunications equipment and services providers. The detention of Meng is not being well received in some business circles—particularly now.
The arrest comes after the U.S. and China tentatively reached a detente in a trade war that has seen both sides impose billions of dollars on tariffs on each other’s goods. The detention could cause a rift in that very fragile truce. Stocks dropped after the detention was made public.
Here are five things to know about the detention:
- Meng Wanzhou is the daughter of the company’s founder and the deputy chair of the company’s board.
- She was arrested in Vancouver on December, but the news was not made public at her request. Meng has now asked for a publication ban on the details of the arrest, which has been granted by the courts. Huawei said it was “not aware of any wrongdoing by Ms. Meng.”
- The specific charges against Meng remain unknown, but the New York Times said the U.S. Commerce and Treasury departments subpoenaed the firm over suspected violation of sanctions against both Iran and North Korea. Charges were filed by the U.S. Justice Department in the Eastern District of New York. The Wall Street Journal reported in April that the U.S. Justice Department was investigating whether Huawei violated U.S. sanctions on Iran.
- China, of course, is not happy about her detention. According to the BBC, a Chinese foreign ministry spokesperson told reporters, “The detention without giving any reason violates a person’s human rights” (and China would know about rights abuse), and demanded that Canada and the U.S. explain the detention and release Meng.
- Meng’s detention coincides with moves to restrict the use of Huawei technology in the U.S. In February, officials from the CIA, NSA, FBI, and the Defense Intelligence Agency told a U.S. Senate committee that smartphones produced by Huawei and Chinese company ZTE posed a security threat. And in May, the Pentagon ordered stores on U.S. military bases to stop selling smartphones made by those two companies out of concern that the Chinese government could be using their technology to spy.