Via Financial Times

A Canadian court has denied an attempt by Huawei’s chief financial officer, Meng Wanzhou, to dismiss an extradition request from the US, where she faces allegations of fraud in a politically charged case that has further strained ties between Washington and Beijing.

Ms Meng, daughter of Ren Zhengfei, the Chinese telecoms group’s founder, has been under house arrest in Vancouver, where she was arrested in December 2018 after landing on a stopover flight at the city’s airport. She was detained at the request of the US, which is seeking her extradition on fraud charges relating to violating US sanctions against Iran.

The US charged her with fraud after allegedly misleading UK-based bank HSBC in 2013 about its ties with a subsidiary operating in Iran. The bank said the misrepresentation put it at risk of breaching US sanctions against Iran because of its work in US dollar-clearing transactions.

The case has been linked to the Trump administration’s efforts to keep Huawei from dominating global 5G mobile networks, arguing that the Chinese company can use its equipment to spy on the west. 

Ms Meng’s detention in December 2018 has also severely hurt relations between China and Canada. Beijing jailed two Canadians — Michael Spavor and Michael Kovrig, allegedly for espionage — which many Canadians say was a retaliation for her arrest.

Her defence lawyers sought to have the case dismissed because they said the charges failed the test of “double criminality” — meaning that the US charges against her are also crimes in Canada. Her lawyers have previously said the charges against her were based solely on sanctions, not fraud, and because Canada did not have sanctions against Iran at the time, she did not break Canadian law. 

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Under the terms of the US-Canada extradition treaty, the alleged crimes must be crimes in both countries.

However, prosecutors have argued the essence of the US government’s case against Ms Meng was fraud, not sanctions. “Lying to a bank in order to get banking services that create risk of economic prejudice is fraud,” Robert Frater, crown lawyer, said during a hearing in January.

Heather Holmes, associate chief justice, on Wednesday dismissed Ms Meng’s application because the issue of double criminality was “capable of being met”, and the allegations “depend on the effects of the US sanctions”.

“I conclude that those effects may play a part in the determination of whether double criminality is established,” she wrote in her judgment.

Regarding the defence’s argument that Ms Meng’s conduct was not a crime because Canada does not have sanctions against Iran, Justice Holmes ruled “it is not necessary that the foreign offence have an exactly corresponding Canadian offence”.

“It is the ‘essence of the offence’ that is important,” she ruled.

Justice Holmes concluded: “The effects of the US sanctions may properly play a role in the couple criminality analysis as part of the background or context against which the alleged conduct is examined.”