Report: Huawei's Arrested CFO Told Staff Temporary Non-Compliance is Okay in Some Cases

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Huawei's Arrested CFO Sabrina Meng Wanzhou told employees in an earlier internal talk on compliance that there are scenarios where the company can weigh the costs and accept the risks of temporary non-compliance.

According to a recent report by SCMP, a transcript of such remarks were distributed to Huawei employees.

She was also cited in the report as saying that while American firms are used to very strict compliance requirements, “our company has not yet formed this habit; that is why communication costs are too high.”

The Chinese vendor declined to comment or verify the remarks, the report adds.

Meng—the daughter of Huawei’s founder Ren Zhengfei—was arrested on Dec 1 in Vancouver Canada, according to the Canadian Justice of Department.

She is sought for extradition by the United States, and a bail hearing has been set for Friday, said the department in a statement.

China’s embassy in Canada said it resolutely opposed the arrest and called for Meng’s immediate release.

Huawei, one of the world’d largest telecoms network equipment vendor, has been probed by US authorities since at least  2016 for allegedly violating US sanction laws by shipping US-origin products to Iran and other countries, according to an earlier Reuters report.

But unlike ZTE, Huawei has never been formally accused of breaching US export sanction.

Huawei in a statement acknowledged the CFO’s detention and the extradition request by the US in a statement.

“Recently, our corporate CFO, Ms Meng Wanzhou, was provisionally detained by the Canadian authorities on behalf of the United States of America, which seeks the extradition of Ms Meng Wanzhou to face unspecified charges in the Eastern District of New York, while she was transferring flights in Canada.

The vendor added that it's been provided very little information regarding the charges and is not aware of any wrongdoing by the CFO.

HSBC was reportedly used to conduct transactions involving Iran

The probe also included whether Huawei used HSBC  to conduct illegal transactions involving Iran, according to a Reuters report.

HSBC could be accused of bank fraud if the Chinese company conducted transactions with organizations from US-sanctioned countries.

The bank is not under investigation, the report quotes an anonymous source as saying.