Huawei CFO committed fraud in breach of USA sanctions, prosecutors say

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Documents obtained through an investigation by the United States authorities show that multiple Skycom bank accounts were controlled by Huawei employees, the filing said.

Wu Xinbo, a professor of global studies at Fudan University, said many Chinese will see Meng's arrest as part of an attempt by the United States to force China to continue manufacturing low-end consumer goods and prevent it from moving up to produce more advanced and valuable products.

Meng, 46, the daughter of Huawei's founder, appeared in a Vancouver court for a bail hearing as she awaits possible extradition to the United States in the investigation of whether Huawei violated us sanctions against Iran.

The surprise arrest, already denounced by Beijing, raises doubts about whether the trade truce will hold and whether the world's two biggest economies can resolve the complicated issues that divide them.

"This will pressure a lot of Chinese officials to look strong in this dispute", said Nick Marro, Hong Kong-based Asia analyst at the Economist Intelligence Unit, who added that technology companies were particularly at risk. She is also the daughter of the company's legendary founder, Ren Zhengfei, who built the company after a stint in the People's Liberation Army.

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The official acknowledged that the arrest could complicate efforts to reach a broader US-China trade deal but would not necessarily damage the process.

However, Kudlow said Trump had no knowledge of the arrest during Friday's interview on FOX Business.

Chinese state-run media said the arrest was part of U.S. efforts to curtail China´s tech industry.

Huawei is the biggest global supplier of network gear used by phone and internet companies, and has been the target of deepening USA security concerns. The Crown lawyer told the hearing that the US alleges Huawei Technologies used subsidiary Skycom to do business with Iran, violating sanctions against that country.

Meng was arrested at Vancouver International Airport on December 1 as she changed planes, and has been detained since. Crown prosecutors argue Meng violated section 380 of Canada's criminal code, which pertains to fraud. Then it is up to Canada's justice minister to decide whether to extradite her.

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It comes as heightened economic tensions between the U.S. and China seemed to be cooling - at least a little.

Huawei has been a subject of U.S. national security concerns for years and Meng's case echoes well beyond tariffs or market access.

The arrest also stroked fears of a potential backlash on American companies operating in China.

The company has appointed chairperson Liang Hua as acting chief financial officer following Ms Meng's arrest.

His pessimistic forecast came a week after President Xi Jinping and his USA counterpart Donald Trump agreed to hold back from applying extra tariffs in January to pave the way for a trade deal. OSAC promotes "security cooperation between American private sector interests worldwide and the U.S. Department of State", according to its website. "It will clearly take more than one convivial dinner between the leaders of the two countries to start bridging that gap".

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The Trump administration has tightened regulations on high-tech exports to China and made it harder for Chinese firms to invest in USA companies or to buy American technology in cutting-edge areas like robotics, artificial intelligence and virtual reality. ZTE paid a US$892 million (RM3.71 billion) penalty.

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