What is the issue?
The Huawei episode raises serious concerns over issues that are relevant to international business and trade.
What is the background?
- One of the world’s largest telecom companies, Huawei, is at war with a few powerful western nations led by the United States.
- Recently, the chief financial officer (CFO) of Huawei Ms. Meng was arrested in Canadafor allegedly breaking U.S. sanctions on Iran by way of bank frauds.
- The CFO is alleged to have tricked financial institutions into making transactions that violated US sanctions against Iran. Click here to know more.
- Thus, the U.S had asked Canada to detain her.
- A Canadian court has granted her bail, but she could face extradition to the U.S.
- The incident, which has led to an uproar in China, has left Canada embarrassed, as any decision will have a bearing on its ties with Beijing.
What are the charges made against Huawei?
- China, along with Russia, has long been suspect in the eyes of the West for spying.
- The basis for this being proven instances of online attacks and unestablished cases of breaches in western computer systems.
- In the case of Huawei, the western line is that as it is a corporation close to the Chinese establishment, its activities cannot be purely technological and commercial.
- They had also alleged that the founder of Huawei has links with the People’s Liberation Army (PLA).
- The specific charge against Huawei is that in every piece of hardware sold by it, there are microchips and devices that provide substantial information to the Chinese authorities.
- However, there has been no major irrefutable evidence communicated to the rest of the world to substantiate this charge.
- Western agencies say that Huawei is so smart and skilful that it is impossible to find out such evidence.
- But Huawei has dismissed the charges against it as fanciful and motivated by the U.S.
What does the conflict reveal?
- The conflict between China and the West, especially the U.S., raises serious concerns over issues with respect to international business and trade.
- The first is its impact on the troubled state of international relations and international law that operates in such cases.
- Some experts cite the concept of ‘long-arm jurisdiction’ in support of the U.S. action.
- Such jurisdiction empowers a nation to enforce its laws and rules over foreign entities, generally through courts.
- However, this concept has a political colour to it and, therefore becomes questionable in cases such as Ms. Meng’s arrest.
- There is also the issue of the apparent ease and arbitrariness with which a nation determined to outwit a rival can hit the latter hard.
- The detention of Ms. Meng was obviously meant to send out a signal not only to China but also to prospective violators of U.S. sanctions.
- The case also reveals that a nation acting so peremptorily may have to brace itself to meet retaliatory action by the targeted nation.
- Also, there does not seem to be an ethical set of rules, if one country violates the permitted sanctions.
- Thus there is a need for a protocol between nations in the area of criminal justice.
- Also, there is a continued fragility of cybersecurity as far as the average computer user is concerned.
- Breaches even in highly protected environments across the globe hardly instil confidence in ordinary customers.
- There is, therefore, a growing reluctance on the part of many large corporations to invest more in cybersecurity.
- This has led to a view that one should not be unduly agitated over inevitable cyberattacks, as long as they do not cause major loss, economic or reputational.
Source: The Hindu
