Huawei Technologies Chief Financial Officer Meng Wanzhou, also known as Cathy Meng and Sabrina Meng, was arrested in Vancouver, Canada, on Dec. 1 2018. The US officially indicted Meng and Huawei on Jan. 28, 2019, accusing the tech-giant of circumventing US sanctions on Iran and stealing trade secrets from Tmobile. This is the latest move by the Trump administration to crack down on large Chinese technology companies after ZTE, another Chinese telecommunications equipment maker, pleaded guilty on sanctions violations last year.
Huawei is the world’s largest telecoms equipment provider, and its second largest mobile phone manufacturer – it is a pillar of the Chinese economy. Meng Wanzhou is the daughter of the company’s father, Ren Zhengfei, a former military officer.
The arrest comes amid the heightened tension between the U.S. and China, as the two countries have struggled to resolve their trade disputes that have escalated though several reciprocal tariffs that have hampered global trade.
In an interview with the South China Morning Post, Alma Angotti, managing director and co-lead of the global investigations and compliance practice at Navigant said, “You can see a gradual progression from the ZTE sanctions case…which shows that [Washington is] taking violations of U.S. Sanctions incredibly seriously."
In an interview with The Wall Street Journal, Joseph Campbell, director at Navigant and former assistant director of the criminal investigative division at the Federal Bureau of Investigation, said that “Chinese authorities could also pressure foreign firms by blocking government access, approvals, business transactions and the shipment of goods.”
This case highlights a broader strategic clash between the two countries over China's state-backed industrial plans to become a tech superpower. The U.S. has repeatedly accused China of forcing technology transfers to Chinese joint venture partners and subsidizing state-owned firms. In an interview with the South China Morning Post, Joseph Campbell said that it was difficult to anticipate what Trump might do but interference with the judicial process would undermine rule of law and public confidence in the system.
Ties between the U.S. and China have become increasingly strained since Canadian authorities arrested Meng Wanzhou in December at the request of U.S. authorities. A New York Post report has indicated that that President Donald Trump is considering signing another executive order to ban U.S. companies from using Chinese-made telecommunications equipment. Navigant's Alma Angotti, told Euronews that "a lot of countries are now focusing on a very broad view of their national security, beyond traditional weapons and borders."
Economic sanctions are the very tool of US foreign policy and national security. We take it very seriously.”
Managing Director and Global Investigations and Compliance Co-Lead