Northwest Arkansas Democrat-Gazette
Bail debated for Chinese tech executive
VANCOUVER, British Columbia — A jailed Chinese technology executive will have to wait at least one more day to see whether she will be released on bail in a case that has raised U.S.-China tension and complicated efforts to resolve a trade dispute that has roiled financial markets and threatened global economic growth.
Meng Wanzhou, the chief financial officer of Chinese telecommunications giant Huawei and daughter of its founder, was detained at the request of the U.S. during a layover at the Vancouver airport on Dec. 1 — the same day that Presidents Donald Trump and Xi Jinping of China agreed to a 90-day truce in a trade dispute that threatens to disrupt global commerce.
The U.S. has accused Huawei of using a Hong Kong shell company to sell equipment in Iran in violation of U.S. sanctions. It also says that Meng and Huawei misled banks about the company’s business dealings in Iran.
After a second daylong session, Justice William Ehrcke said Monday that the bail hearing would continue today.
In urging the court to reject Meng’s bail request, prosecutor John Gibb-Carsley noted the Huawei executive has vast resources and a strong incentive to flee as she is facing fraud charges in the United States that could put her in prison for 30 years.
Gibb-Carsley later told the judge that, if he does decide to grant bail, it should include house arrest.
David Martin, Meng’s lawyer, said Meng was willing to wear an ankle monitor and pay for a surveillance company to monitor her but that she wanted to be able to travel around Vancouver and its suburbs. Scott Filer of Lions Gate Risk Management group said his company would make a citizen’s arrest if she breached bail conditions.
Martin said Meng’s husband would put up as collateral both of their Vancouver homes plus $750,000, for a total value of $11.2 million.
The judge cast doubt on that proposal, saying Meng’s husband isn’t a resident of British Columbia — a requirement for him to act as a guarantor that his wife won’t flee — and his visitor visa expires in February.
The judge also said it’s impossible to guarantee that there would be no flight risk should the court grant Meng’s request.
The prosecutor said Meng’s husband has no meaningful connections to Vancouver and spends only two or three weeks a year in the city. Gibb-Carsley also expressed concern about the idea of using a security company paid by Meng.
He said later that $11.2 million would be an appropriate amount if the judge granted bail, but he said half should be in cash.
The hearing in Vancouver is the start of a long legal process in Canada that could end with Meng being sent to the U.S. to stand trial. Even though the North American neighbors have a long-standing treaty governing extradition, it can take months, even
years, for a defendant to be handed over, if at all.
Should a judge agree to extradite Meng, she would have multiple chances to appeal the decision.
Her arrest has fueled U.S.-China trade tensions at a time when the two countries are seeking to resolve a dispute over Beijing’s technology and industrial strategy. Both sides have sought to keep the issues separate, at least so far, but the arrest has roiled markets.
Stocks around the world fell again Monday over investor concerns about the continuing U.S.-China trade dispute, as well as the cloud hanging over EU-exit negotiations after British Prime Minister Theresa May postponed a vote on her deal for the nation’s departure. In the U.S., stocks were volatile, tumbling in the morning and then recovering ground in the afternoon.
The United States has slapped tariffs on $250 billion in Chinese imports, alleges that China steals American technology and forces U.S. companies to turn over trade secrets. Tariffs on $200 billion of those imports were scheduled to rise from 10 percent to 25 percent on Jan. 1.
But during a Dec. 1 dinner with Xi in Buenos Aires, Argentina, Trump agreed to delay the tariff increase for 90 days, buying time for more negotiations.
Today, China’s government said its economy czar and the U.S. Treasury secretary discussed plans for talks on the tariffs, indicating negotiations are going ahead despite the tension over Meng’s arrest.
Vice Premier Liu He and Treasury Secretary Steven Mnuchin talked by phone about “the promotion of the next economic and trade consultations,” a two-sentence Commerce Ministry statement said. It gave no other details.
Bill Perry, a trade lawyer with Harris Bricken in Seattle, said China’s decelerating economy is putting pressure on Xi to make concessions before U.S. tariffs go up. “They need a trade deal. They don’t want the tariffs to go up to 25” percent, said Perry, who publishes the “US China Trade War” blog. “This is Damocles’ sword hanging over the Chinese government.”
China formally protested Meng’s arrest to the ambassadors of both Canada and the United States over the weekend. Chinese Vice Foreign Minister Le Yucheng summoned Canadian Ambassador John McCallum and U.S. Ambassador Terry Branstad.
Le warned both countries that Beijing would take steps based on their response. Asked Monday what those steps might be, Chinese Foreign Ministry spokesman Lu Kang said only that “it totally depends on the Canadian side itself.”
Huawei, the biggest global supplier of network gear for phone and Internet companies, has become the target of U.S. security concerns because of its ties to the Chinese government. The U.S. has pressured other countries to limit use of its technology, warning they could be opening themselves up to surveillance and theft of information.
Huawei used a Hong Kong company, Skycom Tech, to make transactions in Iran and do business with telecommunications companies there, in violation of U.S. sanctions, Canadian prosecutors said Friday.
Banks in the United States cleared financial transactions for Huawei, inadvertently doing business with Skycom. One unnamed bank and its U.S. subsidiary cleared more than $100 million in transactions related to Skycom through the United States between approximately 2010 and 2014, according to an affidavit.
Some small U.S. phone companies fear they’ll be forced to rip out network equipment made by Huawei as tensions rise.
The Rural Wireless Association in a filing to the U.S. Federal Communications Commission asked for funding and time to “rip and replace” if U.S. officials order carriers to remove equipment made by Huawei.
The FCC is considering whether to bar some subsidy funding for carriers that use Huawei gear, generally regarded as less expensive than competitors’ equipment, out of security concerns.
One carrier — Sagebrush Cellular Inc. of Scobey, Mont. — estimated it would cost $57 million to replace its network, an amount that “for a small rural carrier is prohibitive without replacement funding,” the trade group said.
Information for this article was contributed by Jim Morris, Rob Gillies, Paul Wiseman, Ken Moritsugu, Christopher Bodeen, Joe McDonald and Shanshan Wang of The Associated Press; by Kate Conger and Ian Austen of The
New York Times; and by Todd Shields and Natalie Obiko Pearson of Bloomberg News.