Caixin
May 28, 2020 08:55 AM
BUSINESS & TECH

Huawei’s Meng Wanzhou Loses Key Ruling in Extradition Case

Meng Wanzhou was seen at her residence in Vancouver in September 2019. Photo: IC
Meng Wanzhou was seen at her residence in Vancouver in September 2019. Photo: IC

A Canadian court ruled against the chief financial officer of Huawei Technologies Co. Wednesday in a decision that will continue proceedings seeking to hand her over to the United States to face criminal charges.

After nearly four months of deliberation, the Supreme Court of British Columbia determined that the U.S. allegations against Meng Wanzhou could be considered a crime if the actions took place in Canada. The decision on the so-called "double criminality" means Meng’s case meets a key threshold of Canada’s extradition law.

The ruling does not mean that Meng will be extradited to the U.S. 

Huawei said it was disappointed by the Canadian court ruling and it expects that Canada’s judicial system will ultimately prove her innocence. “Meng’s lawyers will continue to work tirelessly to see justice is served,” the company said in a statement.

Meng will now face new rounds in a prolonged battle over her extradition. Her lawyers will have another chance to fight the extradition with the argument that Canadian authorities violated Meng's rights at the time of her arrest in December 2018 on fraud charges related to alleged violations of U.S. trade sanctions against Iran. American authorities accused Meng of lying to HSBC Holdings about Huawei's relationship with a subsidiary charged with violating the sanctions, putting the British bank at risk of running afoul of U.S. regulations.

Meng is the highest-profile figure caught up in the Trump administration’s efforts to contain Huawei as part of a tech confrontation between China and the U.S. The company has been blacklisted by U.S. authorities, banning it from doing businesses with American businesses.

According to a previously released schedule, Meng’s next court hearings are set for June and may continue until at least the end of the year. Appeals could drag out the process for years longer.

“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,” wrote Associate Chief Justice Heather Holmes in a 23-page decision. “The effects of the U.S., sanctions may properly play a role in the double criminality analysis as part of the background or context against which the alleged conduct is examined.”

“The essence of the alleged wrongful conduct in this case is the making of intentionally false statements in the banker-client relationship that put HSBC at risk,” the justice wrote. “The U.S. sanctions are part of the state of affairs necessary to explain how HSBC was at risk, but they are not themselves an intrinsic part of the conduct.”

 Read more
In-Depth: The Shockwaves of Meng Wanzhou’s Arrest

Meng, 48, is also the daughter of Huawei’s billionaire founder Ren Zhengfei. She was sought by U.S. authorities on allegations including bank fraud, wire fraud, conspiracy to commit bank fraud and conspiracy to commit wire fraud. The U.S. bank and wire fraud charges carry a maximum penalty of 20 years in prison.

Meng was arrested at Vancouver's airport Dec. 1, 2018, on a stopover en route to Mexico City and Argentina. She was later placed under house arrest in Vancouver with bail of C$10 million ($7.21 million). Under the bail agreement, she wears a GPS monitoring bracelet on her left ankle and is trailed everywhere by a team of security guards.

The first phase of her extradition procedure dealt with the issue of whether the offence Meng is accused of committing in the U.S. would have been considered a crime in Canada at the time she was arrested — a key criterion for extradition to proceed.

In a January hearing, Meng's lawyers argued that her alleged actions didn’t violate Canadian laws because Canada didn't have economic sanctions against Iran. The U.S. case is a sanctions-violations complaint framed as fraud in order to seek her extradition, her lawyer argued.

Lawyers representing Canada's attorney general said Meng's alleged offense was fraud, which is criminal in both the U.S. and Canada.

Holmes found that the defense’s analysis on double criminality “would seriously limit Canada’s ability to fulfill its international obligations in the extradition context for fraud and other economic crimes.”

Meng’s arrest triggered a series of diplomatic frictions between China and Canada, leading to the detention of two Canadians in China on espionage suspicions and the halt of billions of dollars of Canadian imports.

On Tuesday, a spokesman of China’s foreign ministry accused the U.S. and Canada of “abusing their bilateral agreement on extradition.”

The U.S. pressed allies including Canada to ban Huawei from next-generation 5G networks, saying the company’s technology could pose threats to national security. Huawei has repeatedly denied the allegations. Earlier this month, the U.S. Commerce Department toughened curbs on Huawei by barring chipmakers using American equipment from supplying Huawei without U.S. government approval.

Turning down an extradition request from the U.S. is rare in Canada. Out of the 798 U.S. extradition requests received since 2008, Canada has refused or discharged eight cases, or 1%, according to Canada’s Department of Justice.

Contact reporter Han Wei (weihan@caixin.com) and Bob Simison (bobsimison@caixin.com)


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