Canada has arrested Huawei's global chief financial officer in Vancouver, where she is facing extradition to the United States on suspicion she violated U.S. sanctions against Iran, the Globe and Mail newspaper reported on Wednesday.
According to Meng's official company biography, she joined the company in 1993 and also serves as deputy chairwoman of the board.
China demanded her immediate release, and a former Canadian envoy to China warned the case might lead to retaliation by the Chinese against American and Canadian executives.
Mark Warner want Canada to follow the USA and Australia and block Huawei from supplying equipment that would connect Canadians to the high-speed mobile network known as 5G.
Back in April of this year, multiple reports described how U.S. authorities were investigating the possibility that Huawei had sold telecommunications equipment to Iran in violation of trade sanctions.
Meng's arrest, which was first reported by the Globe and Mail, comes less than two months after US lawmakers sent Prime Minister Justin Trudeau a letter urging Canada to ban Huawei's equipment from Canadian wireless networks.
The ministry said she faces a bail hearing on Friday but it did not provide further details about the case.
Reports appeared in April 2018 that federal prosecutors in NY had an open probe into whether Huawei had violated USA restrictions against Iran.
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As part of the sanctions, the United States halted the import of Iranian oil, cutting off a key source of revenue for the nation.
'Wanzhou Meng was arrested in Vancouver on December 1, a Canadian government spokesperson told The Globe and Mail.
"We will closely follow the development of the issue and take all measures to resolutely protect the legitimate rights and interests of Chinese citizens", the Chinese Embassy said.
A foreign ministry spokeswoman, Hua Chunying, said then that China hoped the USA would refrain from taking actions that could further undermine investor confidence in the US business environment and harm its domestic economy. "The company believes the Canadian and USA legal systems will ultimately reach a just conclusion", it said.
USA national security officials have said Huawei poses a security risk due to its alleged close links to the Chinese government.
News of the probe broke in April 2018 when it was reported by the Wall Street Journal. And perhaps more importantly, USA officials have urged other countries to ban telecom companies from purchasing Huawei equipment.
Britain's BT Group said on Wednesday it was removing Huawei Technologies' equipment from the core of its existing 3G and 4G mobile operations and would not use the Chinese company in central parts of the new network.
In April, China appealed to Washington to avoid damaging business confidence following the Wall Street Journal report that USA authorities were investigating whether Huawei violated sanctions on Iran amid spiraling technology tensions.