The Huawei arrest case: what if China did the same thing?

In my part of the internet, the wires are burning up over the arrest in Canada, for extradition to the United States, of Huawei’s CFO and vice chairman, Meng Wanzhou (also the daughter of its founder, Ren Zhengfei). One issue that has concerned a lot of people is whether the arrest and extradition request represents a gross extraterritorial overreach of US criminal law.

The answer depends on what your understanding of the facts is as well as your view of the facts as accurately understood. Let’s deal with the first issue first.

Many people believe that Meng has been arrested simply because she (well, her company) traded with Iran, and that that trading violated US sanctions against Iran. In other words, they believe that the US criminalizes any trading with Iran (at least trading of specific weapons and technologies) by anyone on the planet. They ask, in effect, “Hey, if people are OK with this, don’t they then they have to be OK with China criminalizing the selling of arms to Taiwan by anyone on the planet?”

If this were indeed the basis for the US’s claim of jurisdiction, it would indeed be (in the opinion of many, including myself) a gross extraterritorial overreach, and might even violate the due process provisions of the US Constitution.

But although we do not yet know the precise nature of the charge [LATE ADDITION: Bloomberg is reporting that the charge is bank fraud], the US’s claim of jurisdiction is apparently not so sweeping. As Prof. Julian Ku of Hofstra tweeted,

US law prohibits exports of certain US-origin technologies to certain countries. When Huawei pays to license certain US tech, it promises not to export to certain countries like Iran. So it is not unreasonable for the US to punish Huawei for flouting this US law.

Thus, the correct counter-hypothetical is: “What if China had a law saying that you could be criminally charged in China if you were a foreign licensee of China-source technology and then re-exported it in violation of Chinese law when you had promised not to?”

Now we get to the second issue, which is less clear-cut: even under the facts as set forth above, what do we think about individual criminal liability for corporate officers in this situation? Again depending on the exact charge and the facts needed to establish liability, there is potentially a due process issue. Presumably Meng’s defense will raise these constitutional issues. Of course, “lawful under the US Constitution” doesn’t necessarily mean “fair”. Even a claim of jurisdiction that is more restricted than what many people wrongly think the US is making could still be unfair and not something we would want other countries doing.

Finally, an interesting question posed to me by a colleague is whether China does in fact have a law parallel to the US law in question here. Just to save time, I’m going to quote my own (slightly edited) email response:

Let’s make the hypo an exact parallel: US company gets technology from China subject to a promise not to transfer it to any disfavored recipient (let’s assume they are specifically named), and then does so. Does that violate any Chinese criminal law? Not that I know of. China could of course criminalize that, but to the best of my knowledge hasn’t done so.

There is a big difference between US and Chinese criminal law. The coverage of US criminal law is vast and detailed. Each of the states has its own criminal law, and then there is federal criminal law. Congress has criminalized, in exhaustive detail, a vast amount of stuff you would never imagine. The average professional living in the US probably commits at least three federal felonies each day.

Chinese criminal law, by contrast, is contained in one piece of legislation: the Criminal Law. Other laws such as the Anti-Terrorism Law do not define crimes (they may define administrative offenses, but those are only about fines or detention for up to 15 days). At most, other legislation could say that the term X in the Criminal Law is now defined to include Y. It is tempting to say that China manages to get the same coverage as the US simply by having expansive definitions of all the crimes listed in the Criminal Law (the authorities are certainly putting “picking quarrels and stirring up trouble” (寻衅滋事) through its paces) but that’s probably going too far – not because they don’t do that, but because the US coverage is just so large. I don’t know if the US is an outlier among countries generally thought of as “the West”. Maybe.

In any case, I’m pretty confident there is no Chinese law that would criminalize what you are talking about in anything resembling precise terms. If criminalized, I think it would have to be criminalized through a very expansive interpretation of something that is specifically contained in the specific statute called the Criminal Law.

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