A Canadian court granted bail to a top Chinese executive arrested at the United States’ request in a case that has set off a diplomatic furor among the three countries and complicated high-stakes U.S.-China trade talks. Hours before the bail hearing in Vancouver, China reportedly detained a former Canadian diplomat — in apparent retaliation for the December 1 arrest of Meng Wanzhou, Chief Financial Officer (CFO) of Huawei and daughter of the company’s founder.
A Canadian judge ruled on December 11 that Meng, detained at the request of the U.S., can be free on bail while awaiting an extradition hearing. The Vancouver judge, William Ehrcke, said Meng must post bail of $10 million Canadian (US$7.5 million). The judge also said Meng must meet stringent conditions aimed at making sure she doesn’t flee Canada for China. A portion of the money must be paid by other people, who presumably don’t have the vast resources of Meng’s family and would take a greater hit if she absconded. Other conditions include handing over her multiple passports to the court, wearing an electronic monitor and confine herself to one of her two Vancouver homes at night. Judge Ehrcke set her next court appearance for February 6.
The 46-year-old Meng faces U.S. accusations that she misled multinational banks about Huawei’s control of a company operating in Iran. Companies are barred from using the U.S. financial system to funnel goods and services to sanctioned entities, such as Iran and North Korea. This deception put the banks at risk of violating U.S. sanctions and incurring severe penalties, the court documents said.
The arrest has infuriated Beijing, which demanded Meng’s immediate release, and stoked tensions during the trade war truce between the U.S. and China, the world’s two largest economies. Vice Foreign Minister Le Yucheng summoned U.S. Ambassador Terry Branstad a day after he called in Canadian envoy John McCallum to voice China’s displeasure.
“Le Yucheng pointed out that the U.S. side has seriously violated the legitimate rights and interests of Chinese citizens, and the nature of the violation is extremely bad,” the foreign ministry said in a statement.
Amid rising tension between China and Canada, Canadian Public Safety Minister Ralph Goodale confirmed that a former Canadian diplomat had been detained in Beijing just hours before the bail hearing in Vancouver. Michael Kovrig, who has worked as a diplomat in China and elsewhere, was detained by the Beijing Bureau of Chinese State Security during one of his regular visits to Beijing, said the International Crisis Group, for which Kovrig works as North East Asia adviser. At the time of this writing, the Canadian consular officers had not been given access to Kovrig.
Canada had been bracing for retaliation for Meng’ arrest. The Canadian province of British Columbia recently canceled a trade mission to China amid fears government agents could detain Canadians to put pressure on Ottawa over Meng’s detention.