Lawyers for a senior Chinese telecoms executive seeking to avoid extradition to the United States pressed on Tuesday for her release while stepping up attacks in a Canadian courtroom on the fraud charges against her.
Huawei chief financial officer Meng Wanzhou was wanted by the US for allegedly lying to HSBC bank about Huawei’s relationship with its Iran-based affiliate Skycom, putting the bank at risk of violating US sanctions against Tehran.
Her arrest at Canada’s Vancouver airport caused a rift in its relations with China. Nine days after she was taken into custody China arrested two Canadians, former diplomat Michael Kovrig and businessman Michael Spavor.
Their detentions on espionage suspicions, along with Chinese restrictions on Canadian agricultural imports, had been widely interpreted as retribution by Beijing aimed at pressuring Canada to free Meng.
Prime minister Justin Trudeau on Tuesday outright rejected a proposal by one of his predecessors to release Meng in a ‘prisoner swap’ for the Canadian men.
Ottawa, he said, would ‘respect the rule of law and our international treaties as we look to secure the release of the two Canadians who have been unfairly detained.’
Meng had denied the allegations against her. She had been out on bail, living in one of her two Vancouver mansions for the past year.
To secure her freedom, however, she must convince a Canadian judge that the US charges would not stand up in Canada and were politically motivated.
In a high-security courtroom specially built for the prosecution of Canadian suspects in the 1985 Air India bombing, defence lawyer Scott Fenton said there were no grounds to hand over Meng to the United States authorities. He called it a ‘peculiar’ case that relies on ‘an extraordinary use of the instrument of fraud.’
‘As a matter of law the essential elements of fraud cannot be made out. And so the applicant should be discharged,’ he concluded at the end of the first two days of hearings.
Meng followed the proceedings with the help of an interpreter.
In order to win extradition, lawyers for Canada’s attorney general on behalf of the US justice department must demonstrate that the US accusations against Meng would be considered a crime in Canada if they’d occurred there.
Government lawyers assert that Huawei controlled the operations of Skycom in Iran that its staff used Huawei email accounts and security badges and its bank accounts were controlled by Huawei.
Meng, however, in 2013 told HSBC executives during a presentation in Hong Kong that Huawei no longer owned Skycom and that she had resigned from that company’s board.
From 2010 to 2014, HSBC and its American subsidiary cleared more than $100 million worth of transactions related to Skycom through the US, according to court documents filed by Canadian government lawyers.
In a heated exchange with Justice Heather Holmes, defence co-counsel Eric Gottardi said that if Canada were to agree to the extradition request, ‘we’d be allowing a foreign state to criminalise conduct in Canada’ that is not illegal in this country.
‘Sanctions aren’t meant to punish illegal acts by individuals. They’re meant to influence state behaviour,’ he added.
Fenton noted that US banking sanctions underpinning the fraud allegations were repudiated by Canada and other US allies.
‘There is nothing wrong,’ he said, with extending credit or other financial services to companies doing business in Iran. ‘In fact, our government supports it,’ he added.
On Monday, defence lawyers argued that the US was abusing its treaty with Canada by asking it to nab Meng for prosecution as part of a campaign that Meng’s father, Huawei chief executive Ren Zhengfei, surmised aims to crush China’s largest international company.
Meng’s arrest during a stopover on a Hong Kong-to-Mexico flight in December 2018 placed her at the centre of a US-China trade row. US president Donald Trump once mused that he would gladly exchange her release for Chinese trade concessions.
It also put Canada smack in the middle of the feud between the US and China, with which Trudeau had hoped to nurture closer economic ties.
The extradition hearing is scheduled to last until Friday. The Crown would begin presenting arguments on Wednesday. A second phase is scheduled for June.
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