Huawei exec loses hearing
VANCOUVER — A new round of legal arguments looms in a court battle that has strained international relations after a senior Huawei executive wanted in the United States on fraud charges failed to get her extradition case stopped on Wednesday.
Associate Chief Justice Heather Holmes of the B.C. Supreme Court ruled that allegations against Meng Wanzhou could constitute a crime in Canada, setting the stage for legal proceedings to continue.
“On the question of law posed, I conclude that, as a matter of law, the double criminality requirement for extradition is capable of being met in this case,” she told the court.
Holmes read aloud a small portion of her written decision in court as Meng watched with her lawyers.
The ruling means the court will continue to hear other arguments in the extradition case, including whether Meng’s arrest at the Vancouver airport in December 2018 was unlawful.
It also means Meng, 48, will not be permitted to return to China and must remain in Canada. If Holmes rules in Meng’s favour at any step in the hearings, it would set the stage for her release.
Meng’s arrest set off a diplomatic uproar. Beijing has detained two Canadians — Michael Kovrig and Michael Spavor— and restricted some imports in moves widely viewed as retaliation.
The allegations against Meng, who is Huawei’s chief financial officer and the daughter of company founder Ren Zhengfei, date back to 2013.
She is accused of making false statements to HSBC, significantly understating Huawei’s relationship with Iranian subsidiary Skycom Tech Co., and putting the bank at risk of violating U.S. sanctions against Iran.
Meng and Huawei have denied all the allegations levelled against them.
In a statement, Huawei expressed its disappointment in the decision.
“Huawei continues to stand with Ms. Meng in her pursuit for justice and freedom,” it says.
“We expect that Canada’s judicial system will ultimately prove Ms. Meng’s innocence.”
In January, Holmes heard arguments in the case related to the issue of so-called double criminality, or whether the alleged crime would have also been considered criminal if it took place in Canada.
Her lawyers argued that the conduct could not have amounted to fraud in Canada because it relates entirely to the effects of U.S. economic sanctions against Iran. At the time, Canada had no such sanctions, just as it has none now, they said.
The Attorney General of Canada told the court that the fraud allegations could be argued without reference to U.S. sanctions.
In her written decision, Holmes says the allegations do depend on the effects of U.S. sanctions but that’s not enough to dismiss the case.
“I conclude that those effects may play a part in the determination of whether double criminality is established,” she says.
While she found the U.S. sanctions are not an “intrinsic” part of the alleged conduct, they explain how HSBC was at risk of violating them.
“For this reason, I cannot agree with Ms.
Meng that to refer to U.S. sanctions in order to understand the risk to HSBC is to allow the essence of the conduct to be defined by foreign law. Canada’s laws determine whether the alleged conduct, in its essence, amounts to fraud.”
On that issue, Holmes says Meng’s lawyers applied an “artificially narrow scope” to the definition of fraud within the context of extradition.
“The offence of fraud has a vast potential scope,” she says.
The defence’s approach to the double-criminality analysis would also “seriously limit Canada’s ability to fulfill its international obligations in the extradition context for fraud and other economic crimes,” she says.
Holmes says that because it’s OK to consider the sanctions as part of the legal analysis, she is dismissing Meng’s application.
At the same time, Holmes says she would not rule on the “larger question” of whether there is enough evidence admissible under the Extradition Act that Meng’s alleged conduct would justify her committal for trial in Canada on the offence of fraud.
“This question will be determined at a later stage in the proceedings.”
A crowd outside the court included a group of protesters who chanted “No Huawei in Canada” and “Free the two Michaels” in a reference to Kovrig and Spavor.
One of the protesters, Louis Huang, said he is among a group of immigrants from China who have been at the court pushing the Chinese government to release the two Canadians.
“They’re using these innocent people, Canadians, to bargain,” he said.