Huawei Technologies Co.'s chief financial officer was arrested in Canada over potential violations of USA sanctions on Iran, provoking outrage from China and complicating thorny trade negotiations just as they enter a critical juncture.
Huawei issued a statement saying Meng, also the company's deputy chairman and the daughter of company founder Ren Zhengfei was detained while changing flights in Canada to face "unspecified charges" in NY. "The ban was sought by Ms. Meng", the spokesperson wrote.
In a statement to Fortune, a Huawei spokesperson confirmed that Meng was detained, and said that she "faces unspecified charges in the Eastern District of NY".
"The ban was sought by Ms. Meng", continued the statement. "The company believes the Canadian and United States legal systems will ultimately reach a just conclusion", it said.
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Huawei said its relationship with Skycom was "a normal business partnership", and said its business in Iran was in compliance with all applicable laws and regulations.
US authorities have been probing Huawei since at least 2016 for allegedly shipping USA -origin products to Iran and other countries in violation of USA export and sanctions laws, sources told Reuters in April.
Meng, 41, was tipped by some mainland China media as a leading contender to succeed her father, Huawei's founder Ren Zhengfei to take the helm of the telecom giant.
Huawei, in that statement, also said the company complies with all applicable US and Canadian laws. The U.S. previously banned ZTE, a Huawei competitor, for violating a sanctions settlement over transactions with Iran and North Korea.
The report adds, via an unnamed source, that the US believes Meng was trying to circumvent the current USA trade embargo with Iran, although details about this alleged violation were not revealed.
The Wall Street Journal reported in April that the Justice Department had launched a criminal probe into Huawei's dealings in Iran, following administrative subpoenas on sanctions-related issues from both the Commerce Department and the Treasury Department's Office of Foreign Assets Control.
Meng's arrest is related to alleged violations of U.S. sanctions, according to Reuters news agency.
BT is also removing Huawei equipment from the core of its existing 3G and 4G networks, the BBC reported. Earlier this year, Huawei's rival ZTE Corp. was slapped with a ban on buying USA -made equipment over similar accusations. The Pentagon stopped offering Huawei's devices on US military bases citing security concerns.
That same month Washington barred Huawei rival ZTE Corp. from exporting USA technology in a separate case over exports to Iran and North Korea. A proposal for the sale of the HP equipment to Iran contained at least 13 pages marked "Huawei confidential" and included the Huawei logo, Reuters said.
Huawei's comments came in response to the FCC's notice of proposed rulemaking (NPRM) for Protecting Against National Security Threats to the Communications Supply Chain Through FCC Programs.