Serious About Sanctions

The arrest and detention of the Chief Financial Officer of the Chinese technology giant Huawei has put both Canada and the United States in a perplexing diplomatic position.

Meng Wanzhou was taken into custody by Canadian authorities on Dec. 1 at the request of the United States on suspicion of having violated sanctions on Iran. Specifically, she is accused of misleading multinational banks about Huawei’s control of a company operating in Iran, which would implicate them in operations for which they could be made to pay heavy penalties. Furthermore, U.S. officials allege that Huawei was trying to use the banks to transfer money out of Iran.

Chinese authorities have been fuming and threatening reprisals if Meng is not immediately released. They accuse Canada of breaching her “human rights” (a concept with which they have a special familiarity) and have warned Canada of unnamed “consequences” if it does not bow to Chinese demands.

Needless to say, the U.S. role precipitating her arrest has not gone unnoticed in Beijing. The Chinese Foreign Ministry summoned both the American and Canadian ambassadors to China to protest the detention as “lawless, reasonless and ruthless.”

Global markets have already reacted negatively. If the matter is not settled quickly and with a minimum of recriminations, it could derail the attempts to put an end to the trade war between the United States and China.

Besides egregious pressure from Beijing, Canada has its own laws to consider. U.S. lawyers will of course have to make a substantial case for her extradition. But in addition, there is the requirement of “double criminality,” which means the court must determine that the offense for which Meng is sought is also a crime in Canada for the extradition request to be honored.

Presumably, neither the United States nor Canada is eager to find out what “consequences” Beijing has in mind if the extradition goes through. One can hazard a good guess, though, in view of the fact that the Trudeau government is currently pursuing expanded trade with China. And — remarkable timing — Ottawa is just now preparing to negotiate an extradition treaty with Beijing.

The Chinese may be somewhat mollified if request for bail is granted on the basis of health issues cited by Meng’s lawyers. The Chinese have been particularly angry about the way in which her detention has been handled, without informing them “in the first instance,” and, so far, refusing bail.

How the legal and diplomatic issues will be resolved remains unclear, and it will be up to Canadian and American officials to decide.

But even if the Canadians should cave in and find some transparently flimsy reason to deny extradition and let Meng go, an important point will have been made: that the United States and its allies are serious about sanctions on Iran.

The Trump administration has been embroiled in a difficult struggle with the Chinese over tariffs and other matters of trade, and would certainly not want to see its efforts to resolve the tensions — which have recently shown promise — go down the drain.

Yet, despite that risk, Washington has pursued the case against Huawei. It shows a real determination to make the Iran sanctions stick. Forcing other countries to respect them cannot be a pleasant undertaking; but if the sanctions are to amount to more than mere posturing, violators like the Chinese CEO must be stopped.

In the event extradition fails and Meng is let off the hook, it might be attributed to Chinese bullying, and that, too entails a risk: that China will be emboldened to do more of the same in the future.

On the other hand, if Meng is extradited, that will further demonstrate the resolve of the United States.

At some point, Beijing will have to concede that the illegal actions of a private company, no matter how big and powerful, must be subject to the rule of law.