Editorial: Seizure of a Huawei executive over Iran sanctions goes too far

A profile of Huawei's chief financial officer Meng Wanzhou is displayed on a Huawei computer at a Huawei store in Beijing, China. Photo / AP

Editorial

It is five days since the world learned the daughter of the founder of China's Huawei Technologies was being held in the custody of Canadian authorities at the request of the United States, which wants to extradite her to face charges of breaching its sanctions on Iran. Sometimes it takes a few days for the world to awaken to the full implications of this sort of action.

On the face of it, the US demand and Canada's compliance with seem outrageous. Meng Wanzhou is the chief financial officer of the giant digital technology company which is competing keenly with US firms and others for the next generation of services.

At her bail application in Vancouver last Friday a Canadian prosecutor said the US alleges Meng committed fraud five years ago by telling financial institutions Huawei had no connection with a Hong Kong-based company, Skycom, which was said to be selling US goods to Iran in violation of the US sanctions.

Her lawyers denied the charges, saying Huawei had sold Skycom four years earlier. Though she and her husband have homes in Vancouver and she offered to wear a tracking device and pay for around the clock surveillance, the prosecutor considered her a flight risk and opposed bail.

If this seems unobjectionable, consider what the reaction would be in Washington if an American company executive was being held in captivity at the behest of China's Government for something so trifling. It would be a full blown international crisis, probably bringing threats from the White House of dire consequences.

China's restraint in this situation so far is remarkable. Meng was arrested in Vancouver on December 1, the day President Xi and Donald Trump met after the G20 summit in Buenos Aires and agreed to suspend their tariff war for 90 days. Stock markets rose on the news but soon subsided when it was realised they had only Trump's word about what was agreed and the Chinese were saying little. The markets have been distinctly more nervous since December 7 when the Huawei executive's detention became known.

China has so far directed its response only to Canada, calling on it to release her. The Chinese Government may not want to be too protective of Huawei which has been shut out of American, Australian, Canadian and now New Zealand consideration for the provision of digital equipment for fear the company may be a security risk.

Some would claim the risk was proven if China was to press more strongly for Meng's release, but any Government would do the same if one of its nationals was detained on such a contentious issue.

The charge dates from 2015, the same year sanctions on Iran were suspended by the deal reached with the US, Britain, France, Germany, Russia and China under which Iran would suspend nuclear weapons development. The sanctions have been revived by the US alone but it is demanding that firms in all countries cease trading with Iran or be shut out of the US market.

To be shut out of that large market is the only punitive measure the US needs. To seize and detain company executives for this is going too far.