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Huawei Executive’s Arrest Stirs Fears About Corporate Travel

Huawei Executive’s Arrest Stirs Fears About Corporate Travel

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The arrest of a outstanding Chinese language expertise govt touring abroad sparked issues that American executives could also be weak to retaliation, with some consultants advising a reconsideration of journey plans.

Canadian authorities on Dec. 1 arrested Meng Wanzhou, the chief monetary officer of Huawei Applied sciences Co. and daughter of the cellular-technology large’s founder, on the request of U.S. officers following her arrival at a Vancouver airport. Canada is one in every of greater than 100 international locations which have extradition treaties with the U.S.

Huawei mentioned it isn’t conscious of any wrongdoing by Ms. Meng and that the corporate complies with legal guidelines and laws all over the place it operates.

Some diplomats, coverage consultants and attorneys in each China and the U.S. mentioned the arrest might add a confrontational and customized dimension to bilateral tensions and raised the chance that the Chinese language would retaliate.

“Do you need to be the one which exams it?” mentioned James Lewis, a senior fellow on the Heart for Strategic and Worldwide Research, a Washington assume tank.

Moderately than goal American executives, China might select to take a special tack. Because the Trump administration has escalated its commerce struggle this yr, Beijing has sought to painting itself as extra honest, rule-abiding and business-friendly than the U.S.

In response to questions on doable retaliation, a Chinese language International Ministry spokesman, Geng Shuang, mentioned in a daily briefing Friday that “China at all times protects the reputable rights and pursuits of foreigners in China in line with the legislation, however I imagine definitely they need to abide by Chinese language legal guidelines and laws.”

Chinese language authorities in recent times have arrested and prosecuted overseas enterprise executives in high-profile circumstances involving the pharmaceutical, commodity, gaming and monetary industries—some arising amid tense bilateral relations with the house nation of the executives’ firms. Authorities have additionally used journey bans to forestall foreigners concerned in disputes or investigations from leaving the nation.

In October, authorities in Beijing barred a wealth supervisor for

UBS

Group AG from leaving underneath circumstances the lady, the Swiss financial institution and native officers have declined to debate. On the time, UBS suggested sure bankers to postpone all however important journey to China.

Huawei’s significance to China’s expertise sector has sparked concern that workers of U.S. tech firms might be particularly weak if tensions escalate. A senior govt at a big U.S. tech firm mentioned it was untimely to invest on whether or not his firm would change its journey insurance policies.

“It’s actually necessary that individuals within the U.S. authorities take into consideration this 4 steps forward, and never only one transfer at a time,” he mentioned. “If we see a world the place persons are not simply arresting tech executives however looking for their extradition from third international locations, you would create plenty of uncertainty for the flexibility of enterprise leaders to journey all over the world.”

Huawei has figured prominently into friction between Washington and Beijing, with the U.S. claiming the corporate and its tools might be utilized by China for spying—an allegation Huawei officers have constantly dismissed.

The U.S. has alleged that Ms. Meng lied to banks concerning the Chinese language firm’s ties to a subsidiary that did enterprise in Iran. An lawyer representing Ms. Meng at a bail listening to in Vancouver Friday instructed a courtroom “there is no such thing as a proof” that the enterprise, Skycom Tech, was a subsidiary of Huawei throughout the interval in query. The lawyer mentioned the concept Ms. Meng engaged in fraud might be “hotly contested.”

Julian Ku, a professor at Hofstra College College of Legislation who research Chinese language authorized points, mentioned that, even when the arrest isn’t political, “the priority I’ve is China gained’t see it that approach and so they’ll trump up some political factor they simply got here up with this week to punish an govt there.”

Going after a high-profile goal like

Apple
Inc.,

he mentioned, can be a dangerous technique. “They may actually scare off overseas firms,” he mentioned. “It could be dramatic, but additionally pricey.”

An Apple spokesperson declined to touch upon the corporate’s journey coverage for China.

The State Division issued a journey advisory earlier this yr urging Individuals to train elevated warning in China “as a result of arbitrary enforcement of native legal guidelines.” The alert mentioned that U.S. residents visiting and residing in China have confronted arbitrary interrogation or detention on grounds of “state safety.”

Around the globe, various outstanding executives have been detained at airports in current months. In November, Japanese authorities arrested auto-industry titan Carlos Ghosn at a Tokyo airport on suspicions of monetary misconduct. Mr. Ghosn stays in custody, however he hasn’t been charged, and, in line with Japanese broadcaster NHK, has denied wrongdoing.

In January 2017, Federal Bureau of Investigation brokers arrestedOliver Schmidt, a

Volkswagen
AG

govt, at Miami Worldwide Airport as he ready to fly residence to Germany. He was later sentenced to seven years in jail and ordered to pay a $400,000 positive for collaborating within the German auto maker’s emissions fraud.

Victor Shih, affiliate professor at College of California, San Diego’s College of World Coverage and Technique, mentioned executives touring to China “ought to at all times be considerably involved.” He mentioned Ms. Meng’s arrest ought to additional put executives on their guard. “Till this will get resolved,” he mentioned, “it’s an extra danger.”

Write to Te-Ping Chen at te-ping.chen@wsj.com


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