Coverage: Huawei Technologies CFO arrested at request of U.S.

Canadian authorities arrested Huawei Technologies Co.’s chief financial officer at the request of the U.S. government for alleged violations of Iranian sanctions, the latest move by Washington to crack down on the Chinese cellular-technology giant.

Kate O’Keeffe and Stu Woo of The Wall Street Journal had the news:

A spokesman for Canada’s justice department said Meng Wanzhou was arrested in Vancouver on Dec. 1 and is sought for extradition by the U.S. A bail hearing has been tentatively scheduled for Friday, according to the spokesman. Ms. Meng, the daughter of Huawei’s founder, Ren Zhengfei, serves as the company’s CFO and deputy chairwoman.

Ms. Meng’s arrest comes amid a year-long U.S. government campaign against a company it views as a national-security threat. In the past year, Washington has taken a series of steps to restrict Huawei’s business on American soil and, more recently, launched an extraordinary international outreach campaign to persuade allied countries to enact similar curbs.

The U.S. is seeking Ms. Meng’s extradition so as to have her appear in federal court in the Eastern District of New York, according to people familiar with the matter.

Shannon Liao of The Verge reported that the Justice Department launched a probe in April:

It’s an extremely high-profile arrest, the first major break in a probe that has mostly been kept from the public and only after long-harbored suspicions about Huawei have become widespread. Meng happens to be the daughter of Huawei’s founder and CEO Ren Zhengfei, a former People’s Liberation Army engineer whose connection to the Chinese Communist Party has contributed to the suspicions of US intelligence agencies. Meng also serves as deputy chair on Huawei’s board.

Although the arrest occurred on Saturday, it was just publicized today as the US Justice Department told The Globe and Mail in a statement that Meng’s bail hearing is set for Friday. The department spokesperson couldn’t share more details because Meng had requested a publication ban.

Suspicions against Huawei have existed for years and recently, in April, the Justice Department launched a probe into whether Huawei violated sanctions against Iran. Details of the probe remain vague. Another Chinese smartphone maker, ZTE, had already been fined $1.2 billion for selling goods to Iran and North Korea.

Daisuke Wakabayashi of The New York Times reported that Huawei has been trying to make inroads in the U.S.:

Huawei, one of China’s biggest makers of telecom networking equipment and phones, has long faced scrutiny as a security threat in the United States. Washington has expressed concern about using Huawei’s telecommunications equipment, citing spying risk because of the company’s close ties to the Chinese government. Huawei has been under investigation for breaking American trade controls to countries including Cuba, Iran, Sudan and Syria.

Huawei has long tried to make inroads into the United States with its business, but has been bedeviled by the security concerns. In January, Huawei’s effort to sell a new line of smartphones in the United States was derailed when AT&T walked away from a deal to distribute the devices.