The August 2021 criminal sentencing of Canadian nationals Robert Lloyd Schellenberg and Michael Spavor in Chinese courts highlights the need to ensure compliance while operating in China, particularly for companies headquartered in countries with active diplomatic standoffs with Beijing. A Chinese court upheld Schellenberg's death sentence on Aug. 10, 2021 for drug trafficking.
Originally sentenced to 15 years in jail in 2018 for the attempted trafficking of 222 kilograms (489 pounds) of methamphetamine, Schellenberg saw his sentence upgraded to death after subsequent retrial and sentencing in 2019. On Aug. 11, 2021, the Dandong Intermediate People's Court sentenced businessman Michael Spavor to 11 years in prison on espionage charges. Spavor, who was based in Beijing and frequently operated in North Korea, was accused of providing state secrets to foreign governments. A third Canadian national and former diplomat, Michael Korvig, is also accused of spying, though he has yet to receive a sentence.
Canadian diplomats and Prime Minister Justin Trudeau have widely condemned the court proceedings, particularly the trials for Korvig and Spavor, which occurred behind closed doors in March. However, in each case, Chinese officials used existing law to arrest and try the Canadians. China's tough stance on drug trafficking is well known. While it is impossible to objectively comment on the evidence presented during that trial, the death penalty is not uncommon for similar offenses within China.
Regardless, Chinese officials may have interfered in Schellenberg's appeal due to his nationality, paving the way for the court to order a retrial and deliver a tougher sentence. Korvig worked on behalf of the International Crisis Group, a Brussels-based international non-governmental organization that Chinese authorities say was not legally registered to operate in the country.
The sentencings underscore the importance of ensuring compliance for all business and personal conduct in China. Officials can enforce often-overlooked laws amid periods of heightened tensions with other countries. Despite the ongoing diplomatic tensions, Chinese retaliation specifically targeting US and Canadian business travelers in the country remains unlikely, partially because Chinese authorities generally wish to maintain international trade and investment ties, and often view the US and Canadian business communities as potential political allies in political disputes with their governments.
The sentences are likely to ensure relations between Beijing and Ottawa remain strained. Tensions between the two countries escalated after Canadian police detained Huawei executive Meng Wanzhou in December 2018 over her alleged role in violating US sanctions on Iran.
Both Korvig and Spavor were apprehended after Meng was detained, strongly indicating that their arrests were, at least in part, retaliatory. The recent sentencing of these Canadian nationals may signal Beijing's resolve in seeking Meng's release. Additional escalation, including the arrest of other Canadian and US nationals, cannot be ruled out, though Chinese authorities have not detained any more high-profile foreign nationals from either country since 2018.
If such actions occur, authorities are most likely to target individuals of symbolic importance that are found to be in violation of Chinese law, as it will minimize economic and political blowback. The potential for Beijing to retaliate against US or Canadian economic interests also remains, especially if Canadian officials decide to extradite Meng to the US. Retaliatory actions would most likely include increased scrutiny on operations and stricter enforcement of Chinese regulations, rather than a broader and more overt effort to undermine foreign operations in the country.
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