Huawei CFO fails first attempt to block extradition from Canada

Huawei Technologies Co. Chief Financial Officer Meng Wanzhou was so confident of her bid to end her U.S. extradition case that she posed with a victory sign last weekend in front of a Vancouver courthouse. Those hopes were dashed Wednesday when a Canadian judge ruled the proceedings would continue, keeping her under house arrest.

The ruling marks an early victory for U.S. authorities but is already further straining relations between Canada and China. A Chinese embassy spokesperson in Ottawa on Wednesday called the case “a grave political incident” and urged Canada to let Meng return to China. Two Canadians, detained within days of Meng’s arrest in December 2018, also remain jailed in China.

Meng, the eldest daughter of Huawei’s billionaire founder Ren Zhengfei, has emerged as the highest-profile target of a broader U.S. effort to contain China and its largest technology company, which Washington sees as a national security threat. The U.S. Justice Department charged her with conspiring to defraud banks by tricking them into conducting transactions that violated American restrictions on selling technology to Iran.

Associate Chief Justice Heather Holmes of the British Columbia Supreme Court on Wednesday dismissed Meng’s request to throw out the case, ruling that it meets a key test of Canada’s extradition law known as double criminality — or whether the alleged crime in the U.S. would also be a crime in Canada.

Meng, 48, appeared in court Wednesday, dressed in black and wearing a face mask. She had argued that the U.S. was disguising its sanctions-violations allegation as a fraud charge in order to get around the double-criminality rule. Had they taken place in Canada, the banking transactions at issue wouldn’t have violated any Canadian sanctions, they said.

Holmes rejected the argument, saying fraud can be prosecuted in Canada if a U.S. bank was put at economic risk for violating U.S. sanctions.

Meng’s approach “would seriously limit Canada’s ability to fulfill its international obligations in the extradition context for fraud and other economic crimes,” Holmes wrote. “For the double-criminality principle to be applied in the manner Ms. Meng suggests would give fraud an artificially narrow scope in the extradition context.”

The judge’s decision helps clarify an issue that’s been in the spotlight in Canada because of the Huawei litigation, said Brian Heller, a criminal defense lawyer not involved in the case.

“There was a strong argument to be made by both sides,” Heller said. “It wasn’t a slam dunk. This has been the subject of a lot of analysis and it was a very, very important argument to bring forward.”

The U.S. welcomed Holmes’s decision. “The United States thanks the Government of Canada for its continued assistance pursuant to the U.S./Canada Extradition Treaty in this ongoing matter,” a spokesman for the U.S. Justice Department said.

Huawei said in a statement posted on Twitter that the company continues to stand with Meng in her pursuit of justice and freedom. It said it expects Canada’s judicial system will prove Meng’s innocence.

The judge’s ruling doesn’t end Meng’s battle against handover.

She also claims there was an abuse of process when she was arrested in 2018 and has sought additional details from the Canadian government, police and border officials on the circumstances of her detention. The Canadian government claims some documents are privileged and she can’t see them. Her lawyers plan to challenge those claims.

After issuing her decision, Holmes canceled hearings that were scheduled for June and will instead determine a new timetable next week. Meng left the court house, slipping out a back entrance and avoiding a throng of media and anti-China protesters on the front steps, where she’d posed assuredly with two fingers in a “V” just days earlier.

Meng faces tough odds of beating the U.S. extradition request. Of the 798 such cases received since 2008, Canada has refused or discharged only eight, or 1%, according to the country’s Department of Justice.

The pursuit of Meng by U.S. authorities predates the Trump administration. Officials had been building a case against her since at least 2013, three years before Trump was elected president. The extradition case was triggered five years later when Meng was arrested on a U.S. handover request during a routine stopover at Vancouver airport, a city where she owns two homes and often spent summer holidays.

But Wednesday’s ruling is also likely to further strain the tensions between China and the U.S., already exacerbated by accusations from President Donald Trump that China was slow to disclose the peril of coronavirus. Trump has threatened consequences for Beijing over its handling of the pandemic and more recently its steps to assert more control over Hong Kong.

The U.S. is attempting “to bring down Huawei and other Chinese high-tech companies, and Canada has been acting in the process as an accomplice of the United States,” the Chinese embassy spokesperson said Wednesday. Canada should “not to go further down the wrong path,” the spokesperson said.

In the weeks after her arrest, China put two Canadians — Michael Spavor and Michael Kovrig — in jail, halted billions of dollars in Canadian imports and put two other Canadians on death row, plunging China-Canada relations into their darkest period in decades.

“The government of Canada’s top priority is and remains securing the release of Michael Kovrig and Michael Spavor, who have been arbitrarily detained for over 500 days,” François-Philippe Champagne, Minister of Foreign Affairs, said in a statement.

Canadian Prime Minister Justin Trudeau — caught between his country’s two biggest trading partners — has resisted any attempt to interfere, saying the rule of law will govern Meng’s case.

Heller said Holmes’s decision Wednesday appeared to bear that out. “It is another example of our judiciary acting independently and what strikes me as remarkable is China’s apparent belief that, acting as it has, it could somehow influence that outcome,” Heller said.

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Huawei CFO fails first attempt to block extradition from Canada