top of page
  • Writer's pictureEdward Lehman

Meng Wanzhou and the Long Arm of the U.S. Legal System

Huawei Technologies Co-Chief Financial Officer Meng Wanzhou and the United States Department of Justice recently entered an agreement to defer prosecution of U.S. charges against her until late 2022, after which point the charges could be dropped, and allow Meng to return to China, bringing an end to a nearly three-year legal saga that has complicated relations between the United States, China and Canada.

Meng was detained by the Canadian authorities in 2018 when she transferred at Vancouver airport. The Canadian authorities detained her at the request of the U.S., who alleged that Meng had committed the crimes of wire and bank fraud, and committed the crime of violating its Iran-related sanctions law. Later, the U.S. government submitted a record of the case to the Canadian courts to request Canada to extradite Meng to the United States.

Meng’s deferred prosecution agreement released her on the condition that she agreed to a “statement of facts” about her case, including that she provided “knowingly false statements” to HSBC about Huawei’s business dealings in Iran, and that Huawei had violated U.S. sanctions on the Middle Eastern country.

Meng pleaded “not guilty” to charges of fraud and conspiracy. The charges will be dropped in December 2022 under the deal, which would leave her with no criminal record. The U.S. Justice Department also withdrew its request that Meng be extradited to the U.S. from Canada.

As Meng returns to China, Huawei has changed dramatically. Sanctions on Huawei that were implemented by former U.S. President Donald Trump at the height of trade tensions with China are still largely being kept up by current President Joe Biden.

Before being toppled from its perch, Huawei sold network gear to 45 of the world’s top 50 carriers, serving over a third of the world’s population. The company was also China’s top smartphone brand, beating out top foreign names such as Apple and Samsung and an array of younger domestic competitors, including Xiaomi and BBK Electronics’ suite of popular brands Vivo, Oppo and Realme.

Now, Huawei has just 10 percent of China’s smartphone market in the second quarter, down from 72 percent in the same quarter last year. U.S. sanctions have led to at least $30 billion USD of losses for Huawei’s smartphone business a year.

Meng's ordeal and subsequent release shines a light on the long-arm jurisdiction of the U.S. protruding beyond its borders. Meng’s situation puts the U.S. in a very difficult position because it has the potential to show the world that it can weaponize its domestic laws to realize policy.

An arrest of a high-profile international businessperson that is politically motivated is antithetical to the principles of AmChamUSA, as it undermines credibility and judicial independence. But for a country or countries to further use the arrest to retaliate through economic means and protectionist trade barriers, or worse, seek to exploit it for political gain, flies in the face of building sustainable trade that benefits all business stakeholders.

18 views0 comments


bottom of page