I’ve been trying to understand why Meng Wanzhou, CFO of Huawei, was arrested in Canada at the request of US authorities. From what I can gather, it seems to be related to her somehow helping Huawei get around US sanctions on Iran. She reportedly made statements to HSBC bank that the a company named Skycom, which was doing business in Iran, was not an affiliate of Huawei. What I don’t understand is why Huawei, which is a Chinese company, and Meng Wanzhou, who is a Chinese citizen, would be bound to honor US sanctions on Iran. If China decided to institute sanctions on, say, Freelandia, and my US based business continues to do business with Freelandia, would that give China the authority to put out a warrant for my arrest?
Because she attempted to deceive various international banks to give loans to a shell company in Iran knowing this was a violation of US sanctions. YOU might not think the US sanctions are a big deal, but those banks would have been on the hook for those loans if it came out (which, obviously, it did)…and they would have faced rather large (potential) US economic penalties for violating them (there is also the allegation she sent US tech to Iran which would be another issue, especially for the US). So, that’s why she was arrested. The US is attempting to extradite her at this point.
Is there some international agreement that enforces sanctions one country puts upon another?
I think US sanctions should apply to US businesses and citizens. The part that I don’t get is why US sanctions apply to Chinese companies. If we start saying that US sanctions apply to every country around the globe, what’s to stop Russia from imposing sanctions on Ukraine, or China on Taiwan, and then arresting any American businessperson passing through Russia or China because that businessperson has business in Ukraine or Taiwan?
Well, US sanctions wouldn’t apply to Chinese companies except in so far as the US would, obviously, retaliate against any company breaking the sanctions. If this Chinese company had violated the sanctions alone and by itself without trying to use international banks and the like (as well as selling US technology) then I doubt she would have been arrested…more likely her company would have been barred from selling in the US or some similar action.
Since China hasn’t put sanctions on companies doing business in Taiwan, I’m unsure how that relates. Same goes for Russia. I suppose they COULD do that…and if an American attempted to defraud international banks and sell Russian/Chinese tech to the company under sanction then that person certainly could be arrested. RUSSIA is under sanction for it’s Crimea adventure, and, basically, if a Russia national working for a Russia flagged company tried to pull a similar stunt and flew to Canada or some other country with that pesky rule of law stuff (and an extradition treaty with the US) then I’m confident that Russian would also have been arrested.
Put it this way. Justin Trudeau looked into this when it was first happening and supported Canadian law enforcement actions on this…at a potential large cost wrt backlash from China. I’d say that should go a long way to indicating that the Canadians, at least, actually think there is something to this, not just a US snit over sanctions.
I’ve been wondering about this too. Why is a Chinese National bound by US law?
Her arrest isn’t about the sanctions, at least not directly; it’s about the fact that she was involved in obtaining loans from banks under false pretenses.
The US says she broke our laws, she says she didn’t. So I guess they will sort this out in court.
Thanks, Machine Elf.
Does her company do business in the US? That may be a reason they need to abide by our sanctions.
Yes, Huawei is a massive datacenter hardware vendor
In case anyone harbors warm sentiments about Huawei, this article (from Bloomberg) should be bracing.
Not to defend Huawei (which is almost certainly involved in spying of some sorts), but that article specifically is thought to have some problems regarding both the supposed technology (1-wire/I2C isn’t an easy after-thought), as well as confirmation (Apple claims to have done a thorough investigation and strongly denies it).
An alphabet soup of US agencies say not to use Huawei for other reasons though, so you really shouldn’t.
Just to complicate the situation that was already pretty touchy, the Cheeto Benito says he’s willing to “intervene”, turning this from a sticky-but-legal extradition and US dept of Justice issue to part of his ridiculous trade dispute. (Which I complain about in a different thread). So we have all that to look forward to.
Or…
He just took advantage of a reciprocal extradition treaty to drag Canada into his fight with China. Something they have very successfully avoided, to this point. He intends to sour relations between Canada and China, it seems. He no doubt hates seeing them making deals, being on good terms, etc.
Any bank that wants to do business with the USA has to abide by its sanctions rules. IIRC, that includes not doing business with any banks that do NOT abide by US rules. SO the banking world is divided in two - those that abide by US rules, and those that don’t. And these two sets of banks don’t talk to each other. Guess which group any bank wants to belong to? Except maybe the National Bank of Iran and the National Bank of North Korea, there are not many banks that want to be divorced from the US system. After all, that means you can’t exchange cheques, deposits, money transfers, etc - ie. do any business - with the US banking world.
I presume some of the banks she allegedly mislead had some presence in the USA, hence the USA claims to have jurisdiction.
There’s an analogy about 800-pound gorillas in here somewhere. Trump blatantly turning it into a trade war chess move (Checkers? Tic tac toe? Rock-paper-paper?) hasn’t helped convince people it’s strictly about rule of law.
(If you recall, the USA passed a law about foreign banks reporting assets of US citizens abroad - with penalties so onerous that the net result for most foreign banks was to dump any citizens doing business with them, rather than risk being accused of misreporting. 800lb.)
Moderator Note
Let’s keep the political jabs out of General Questions. No warning issued, but don’t do this again.
Colibri
General Questions Moderator
Moderator Note
Let’s avoid the side political commentary. No warning issued.
Colibri
General Questions Moderator
If a Chinese person is doing business with US banks, that person has to comply with US banking laws, which in this case included a requirement to comply with the sanctions.
It’s the allegation of breach of US banking laws that is the basis for the extradition request, not the sanctions as such.
According to the Wikipedia entry I linked to upthread, the bank in question is HSBC - which does have US operations.
Sorry, but my point remains - the alleged “simple legal issue” has now been transformed through lack of subtlety into what appears to the rest of the world as a third world level pressure tactic. I have no doubt that the original intent was to simply enforce US banking laws. However, it has now appears to the rest of the world a simple leverage ploy in a trade war. China has felt free to retaliate with its own trumped-up (small “t”) detention of Canadian nationals.
Not a political jab or diatribe… this is simply the same behaviour that the USA has pushed in many other venues long before the current president. As examples, the USA has tried for 60 years to enforce an embargo on dealing with Cuba, with dwindling success. It is trying to reinstate sanctions on Iran and foreign companies with no connection to the USA are having difficulty because of its control of the banking system. This extradition / prosecution is just more of the same. It may succeed, but each time it does so without international consensus is simply a pyrrhic victory.
So to answer the OP - the USA can claim to have the right to control certain aspects of international commerce because the banks in question also have dealings with America. Whether they get away with such a claim depends on the cooperation of foreign countries like Canada. Otherwise, all it does is discourage foreign businesspersons from visiting the USA.
I’m not sure how this actually works. I was under the impression that to extradite someone, the act also had to be a crime in Canada. Perhaps, depending on the definition of the crime, it is? I’m not sure what the situation is with acts committed overseas against a bank with a presence (but not based) in Canada, with transactions that did not affect Canada. Obviously, the situation is not that simple, based on the fact that the extradition hearing seems to be turning out to be fairly lengthy.
In some cases - the most obvious being the laws against sex tourism - countries (including USA and Canada) claim to be entitled to regulate what happens outside their jurisdiction and have not been told by their courts that they cannot. But AFAIK IANAL that only applies to that country’s residents and citizens who travel abroad to commit these acts, not as a general excuse to prosecute anyone passing through the country.
I think you are conflating what Trump tried to do (and was shut down for by his own folks at Justice) with the larger issue. TRUMP tried to use this as a trade bargaining chip, but as noted he was shut down in his attempt. The crime she is being detained for in Canada isn’t ignoring the sanctions but international bank fraud and possibly selling (illegally) US technology to Iran. Since the details are still a bit hazy we don’t know more than that, but, as I noted earlier, the Canadian government seems to think there is enough to this to do what they are doing, even in the face of China already retaliating.