Between a Dragon and an Eagle: What Is the Huawei Controversy and Why Does It Matter to Canadians?

Since 1979, the Unites States (US) has played a key role in placing trade sanctions on Iran. When a trade sanction or embargo is placed on a state, the country or body which is imposing it essentially leverages the power of commerce to sway the actions of the other state. In an attempt to influence Iran’s pursuit of a nuclear program, and more specifically its uranium enrichment program, the United Nations Security Council passed Resolution 1696 in 2006. The UN sanctions were lifted in January 2016, but the US subsequently withdrew from the Iran Deal and placed its own sanctions on Iran in November 2018. Supposed violations of these sanctions lie at the root of the controversy surrounding Huawei Technologies Co., Ltd, its subsidiaries, the detention and arrest of Meng Wanzhou (the company’s Chief Financial Officer) by Canadian officials, and the US’ request for Meng’s extradition.

Acting on information provided to them by the US Department of Homeland Security on November 29, 2019, an Authority to Arrest was acquired by Canadian authorities from the Department of Justice. On November 30, a B.C. Supreme Court Judge signed a provisional warrant for Meng Wanzhou’s arrest. Pursuant to the extradition treaty between Canada and the US, Canada Border Services Agency (CBSA) flagged Wanzhou for detention, and upon her flight’s arrival at Vancouver International Airport on December 1, 2018, the Royal Canadian Mounted Police (RCMP) arrested her following her attempt to clear Canadian customs.

Following questioning by authorities and a visit to the Richmond General Hospital for treatment of hypertension, Wanzhou was transferred to the Alouette Correctional Centre for Women in Maple Ridge, British Columbia. As per the terms of a consular agreement between Canada and China, the RCMP claimed that they were in contact with the Ottawa and Vancouver Chinese consulates shortly after Wanzhou’s arrest. She was released on bail on December 11, 2018 and on either December 10th or 11th, former Canadian diplomat Michael Kovrig, and businessman Michael Spavor were arrested by Chinese officials on national security/spying charges. Also, and supposedly in retaliation to Wanzhou’s arrest, Canadian citizen Robert Lloyd Schellenberg, who had previously been sentenced to two and a half years in Chinese prison for drug trafficking, was retried and received a death sentence.

For the extradition process to continue, the U.S. government was required to file a formal request for extradition the within the mandated 60 days, which it did. On January 28, 2019, two indictments were filed in New York and Washington, which cited 23 grand jury charges. Of primary concern are the allegations that Huawei/Meng Wanzhou intentionally and repeatedly misrepresented the true nature of Huawei and Skycom Tech Co.’s (subsidiary) relationship to the US Government and US financial institutions such as HSBC. This resulted in the financial institutions’ clearing of hundreds of millions of dollars’ worth of transactions and violation of Iranian Transactions and Sanctions Regulations.

On March 1, 2019, the Department of Justice issued an Authority to Proceed, meaning that Canadian courts must now establish whether or not there is sufficient evidence to justify Wanchou’s committal to extradition, which the Minister of Justice must then personally decide upon. If the Minister grants an Order of Surrender, Wanzhou would then be able begin the appeal process.

On March 3, 2019, Wanzhou’s lawyers filed a lawsuit against the Canadian government, CBSA, and the RCMP. The suit alleged that Wanzhou was detained, searched and interrogated ‘under the guise of a routine customs exam’ for three hours and was compelled to provide information such as passwords, which CBSA agents used to ‘unlawfully view the contents’ of her seized devices. CBSA officers’ actions such as these, however, are sanctioned by Canada’s Customs Act.

Canada has a rather significant stake in how this controversy plays out. Regarding Canada-China relations, China is Canada’s second largest trading partner with total trade between the two states growing from $11- 64.4 billion between 2001 and 2016. Additionally, there are over 500,000 Chinese international students in Canada, who contribute approximately $15 billion to the Canadian economy. When Meng Wanzhou was arrested in Canada, Chinese officials threatened Canada with serious consequences and condemned Canada’s action as an act of terrorism and as constituting something much worse than an ordinary human rights violation. Managing this relationship is of huge importance given that the future of both Canadian/Chinese trade and economic relations, and the fates of Michael Kovrig, Michael Spavor and Robert Lloyd Schellenberg, hang in the balance.

Canada’s relationship with its largest trading partner must also be tended. In 2018, trade between the Canada and the US amounted to $337.8 billion, and 75.1% of all Canadian exports were to the US. Not only are Canadian and American economies and economic interests hugely interconnected, but they remain each other’s closest allies. Since the Paris Peace Conference in 1919 and certainly since 1939 when the US scrapped War Plan Red (the provisionary US invasion plan for Canada), Canada and the US have been close allies. Since then, Canada and the US have become fellow NATO and ‘Five Eyes’ allies. Given these ties, the maintenance of a close relationship with the US is, and will continue to be, a crucial concern for Canada in planning for its future security.

Security is a key concern for Canada and its allies in pursuing their technological futures. Huawei is the leader in the development of 5G data networks, which are the future of cellular network technology. Currently, three of Canada’s ‘Five Eyes’ intelligence allies have banned Huawei from being included in their 5G infrastructures, because the Chinese government can order Huawei to surrender its data at any time. The fear for Five Eyes allies is that this results in built-in spying capabilities for China. As it stands, Canada has not banned Huawei from being included in its 5G infrastructure and despite CSIS warnings, some Canadian universities remain involved with Huawei in related projects. It is in Canada’s best interest to monitor these relationships closely and be prepared to act proactively and decisively to ensure that the economic and security interests of Canadians are always being put first.


Featured Image: U.S. Commerce Secretary Wilbur Ross, Acting Attorney General Mathew Whitaker, Homeland Security Secretary Kirstjen Nielsen, FBI Director Christopher Wray Announce 23 Criminal Charges Against Huawei & Wanzhou, 28 January 2019. Courtesy of U.S. Department of Justice.

 Disclaimer: Any views or opinions expressed in articles are solely those of the authors and do not necessarily represent the views of the NATO Association of Canada.

Willow Hillman

About Willow Hillman

Willow is a Junior Research Fellow at the NATO Association of Canada, and serves as the Events and Special Projects Coordinator on the national executive board of the Youth Atlantic Treaty Association. Willow holds a Bachelor of Arts Honours degree from Queen’s University, which is comprised of a major in Political Studies (International Relations, Security Studies and Political Theory), and a minor in Philosophy (Continental Philosophy and Phenomenology). She also holds a Master of Arts degree from her alma mater in Political Studies where she specialized further in International Relations and Security Studies. Her major research interests include nuclear deterrence and nonproliferation, security, alliance politics, civil-military relations, and most recently Canadian defence procurement. Willow is currently pursuing a Master of Public Administration at Queen’s University and will graduate in 2019. She is also a martial artist with over 15 years of experience, a martial arts instructor and active proponent of both youth and female engagement in politics. Willow can be reached by email at willowsrhillman@gmail.com or yatacanada.events@gmail.com.