Huawei CFO sues Canada

Huawei’s CFO, Meng Wanzhou sued Canadian government claiming that she was detained and interrogated before being told she was arrested in Canada. 

Background 

Huawei is a Chinese tech company based in Shenzhen that is leading global provider of information, communications technology (ICT) infrastructure and smart devices. In 2018, Huawei sold more phones than Apple & has become the world's second-largest smartphone maker, behind Samsung.

Huawei is under investigation for potential violations of US sanctions against Iran. US lawmakers have repeatedly accused the company of being a threat to US national security, arguing that its technology could be used for spying by the Chinese government. Huawei’s 74-year-old founder Ren Zhengfei was a technician for the People’s Liberation Army before founding Huawei in 1987. The Chinese government has invested billions of dollars in Huawei, giving it a competitive advantage in the global marketplace.  

Canada arrested Meng, Huawei’s chief financial officer & the daughter of Huawei’s founder, at the request of the US on 1 December 2018 at Vancouver airport. Meng has been released on bail and is living in Vancouver awaiting extradition proceedings to the US. Meng’s arrest was a part of an ongoing investigation by U.S. prosecutors into whether Huawei conspired to defraud HSBC and other banks by means of misrepresenting Huawei’s relationship with the suspected front company, Skycom Tech as it sought to evade sanctions against Iran.

Analysis 

Huawei Technologies Co. Chief Financial Officer Meng Wanzhou has filed a civil suit against the Royal Canadian Mounted Police, the Canadian Border Services Agency and the federal government alleging her constitutional rights were violated when she was detained while on a stopover in Vancouver. Meng claims they detained, searched and interrogated her before telling her she was under arrest.

Lawyers for Meng said they had filed a notice of civil claim in the British Columbia supreme court. Meng’s lawsuit alleges that instead of immediately arresting her, authorities interrogated her “under the guise of a routine customs” examination and used the opportunity to “compel her to provide evidence and information”.

The suit also claims Canada Border Service Agency agents seized her electronic devices, obtained passwords and unlawfully viewed the contents and intentionally failed to advise her of the true reasons for her detention “This case concerns a deliberate and pre-meditated effort on the part of the defendant officers to obtain evidence and information from the plaintiff in a manner which they knew constituted serious violations of the plaintiff’s rights,” the claim says.

Meng’s arrest set off a diplomatic furore and severely strained Canadian relations with China. Beijing has accused Washington of a politically motivated attempt to hurt the company. “China strongly opposes Canada’s insistence to proceed with the so-called extradition of Ms. Meng Wanzhou, and it has made a solemn representation,” the ministry said in a statement. “It is a serious political incident. We again urge the US to rescind its request for the extradition of Ms Meng and call for Canada to release her immediately.”

China detained former Canadian diplomat Michael Kovrig and Canadian entrepreneur Michael Spavor on 10 December in an apparent attempt to pressure Canada to release Meng. Kovrig and Spavor haven’t had access to a lawyer or to their families since being arrested.

Lynette Ong, an associate professor of political science at the University of Toronto who focuses on China, quipped that the detained Canadians should take Beijing to court for violation of basic human rights, taking a leaf from the Meng lawsuit. “The violation of their human rights is so much more grave than the violation of her constitutional rights,” Ong said. “But that’s not even possible for them. The fact that they were denied a lawyer in the first place means they are not entitled to any justice.”

Nicholas Dorion, a spokesman for the Canada Border Services Agency, said it’s not a practice of the agency to comment on legal matters that are before the courts. Julian Ku, senior associate dean for academic affairs at Hofstra Law, noted the civil action is separate and apart from Meng’s extradition proceeding. He said the lawsuit will allow her to argue she is being unfairly treated and support her broader public relations claim that the detention is part of the US and Canadian political conspiracy against Huawei.

Assessment 

Our assessment is Huawei has invested hugely in Canada, with over $500 million in research and development including 5G technology at leading Canada universities. We feel that Canada is taking a risk with the arrest which could undermine the country’s economic interests and security viz a viz China, one of its largest trading partners. 

We feel that China is likely to invoke the  SNC Lavalin controversy, to advocate for Meng’s cause. PM Trudeau had cited the 'rule of law' as the reason that he is unable to interfere in Meng's case. Conversely, Trudeau and his aides have allegedly pressurised his attorney general to help SNC Lavalin to avoid corruption trail with regards to bribes paid to the Libyan government.  

Image Courtesy - Kremlin.ru (https://commons.wikimedia.org/wiki/File:Kostin_Putin_Meng_20141002.jpeg), https://creativecommons.org/licenses/by/4.0/legalcode