Meng Wanzhou’s arrest: The legal dimension

This week on Sinica, Kaiser and Jeremy speak with Julian Ku, Senior Associate Dean for Academic Affairs and Maurice A. Deane Distinguished Professor of Constitutional Law at Hofstra University. After the arrest of Huawei Chief Financial Officer Mèng Wǎnzhōu 孟晚舟 in Vancouver at the behest of the U.S. Justice Department dominated international headlines in December 2018, U.S.-China relations have entered uncharted territory. The three convened to discuss the many legal aspects of her arrest and what this means for the bilateral relationship moving forward. What to listen for on this week’s Sinica Podcast: 7:54: Bank fraud, sanctions violations, or competition over 5G? All three? In response to Jeremy, Julian explains the strategy behind the decision to charge Meng with bank fraud and how this differs from the legal strategy in charging ZTE: “...as they did with ZTE, it’s actually much easier for the Commerce Department to just go after them on a civil standard and say you’re violating our sanctions laws and we’re just going to cut you off from the U.S. market. There’s no jury, there’s no trial, you don’t have to prosecute that person, and you don’t have to worry about the complications with extradition.” 20:15: What internal processes and parties were involved in this arrest? Julian explains how these extradition requests are generally handled as they work their way through various government offices. “It’s sort of like a bureaucratic process but with a little bit of wiggle room among the different departments so that you’re not putting a country in a bad position. So, I think Canada is supposed to have a little room to think about this, and I think ideally we gave them a chance to think about it and turn them down. But we obviously really wanted this to happen.” 34:24: Julian discusses the role that variable interest entities (VIEs) play in Chinese companies and the legal claims made by Meng and HSBC. “For tax purposes or for regulatory purposes, the law will sometimes allow companies to be structured in different ways...or for corporate governance purposes. Having said that, there [is] also a long tradition of what we call piercing the corporate veil in the United States. Which is, we say, ‘Look, we know technically it’s a separate corporation but because they commited a separate tort or crime, we’re just going to pierce the corporate structure and go straight to the shareholders and hold them accountable.’” Recommendations: Jeremy: Two Kinds of Time, by Graham Peck, with an introduction by Robert Kapp. A book of observations of China from the 1940s. Julian: Indonesia Etc.: Exploring the Improbable Nation, by Elizabeth Pisani. A 2014 memoir of a journalist from the U.K. in Indonesia. Kaiser: The instrumental progressive rock band Animals As Leaders, led by guitarist Tosin Abasi.