Meng Wanzhou, chief financial officer of Huawei, is pictured in B.C. Supreme Court in Vancouver, Monday, January 20, 2020 in this court sketch. THE CANADIAN PRESS/Jane Wolsak

Allegations against Huawei executive Meng Wanzhou not fraud in Canada: defence

Meng is accused of lying to HSBC about Huawei’s relationship with an Iran-based subsidiary

A lawyer for Huawei executive Meng Wanzhou says she should not be extradited to the United States to face fraud charges because her alleged misconduct doesn’t amount to fraud in Canada.

Scott Fenton told a British Columbia Supreme Court judge on the second day of Meng’s extradition hearing that people can’t be convicted of fraud in Canada unless their misrepresentations cause harm or a risk of harm.

Meng is accused of lying to HSBC about a Huawei subsidiary’s business in Iran, putting the bank at risk of criminal and civil penalties for violating American sanctions.

Fenton says Canada does not have similar sanctions against Iran and therefore it’s impossible to prove a fraud case against Meng because the bank would not have faced any risk in Canada.

The hearing in Vancouver this week is focused on the legal test of double criminality, meaning that Meng’s alleged conduct must also be illegal in Canada for her to be extradited to the United States.

The case has severely strained Canada-China relations, with Beijing calling the charges “political” and Deputy Prime Minister Chrystia Freeland urging the release of two detained Canadians.

Canada lifted sanctions against Iran in 2016 after world powers reached a nuclear deal with the country. The U.S. withdrew from the deal in 2018 and imposed sanctions again while also adding new penalties.

Fenton says the only risk HSBC faced was in the United States because of its “peculiar” sanctions that are “out of step” with Canada and the rest of the international community.

“The risk of loss is driven by legal risk — legal risk that only exists in the United States of America,” he says.

He also argues that HSBC faced no risk in Canada because the country would not impose criminal fines against an “innocent victim” of fraud, which the bank would be in this alleged scenario.

Meng denies the allegations and is free on bail and living in one of her two multimillion-dollar homes in Vancouver. The judge has allowed her to sit behind her lawyers at a desk, rather than in the prisoner’s box, so she and her Mandarin interpreter can better follow proceedings.

China has detained Canadians Michael Kovrig and Michael Spavor for over a year without access to lawyers or their families and has restricted some Canadian commodity imports in actions widely seen as retaliation.

If B.C. Supreme Court Justice Heather Holmes decides the legal test of double criminality has not been met, Meng will be free to leave Canada. But if Holmes finds there is double criminality, the hearing will proceed to a second phase.

That phase, scheduled for June, will consider defence allegations that Canadian and American authorities conspired to conduct a “covert criminal investigation” at Vancouver’s airport during her arrest in 2018.

Lawyers for the attorney general deny those allegations and argue that the defence’s focus on sanctions is a “complete red herring.” They say Meng’s alleged lies to HSBC are sufficient to prove a fraud case in Canada.

READ MORE: Meng’s lawyer argues at extradition hearing that fraud allegations are ‘facade’

The Canadian Press


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