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Defence says charges against Huawei CFO Meng a ‘fiction’

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Huawei chief financial officer Meng Wanzhou on Monday leaves her Vancouver home to begin her extradition hearing in British Columbia Supreme Court. Meng is wanted by US authorities for alleged fraud. AFP

Defence says charges against Huawei CFO Meng a ‘fiction’

The Chinese telecommunications executive whose arrest in Vancouver badly strained Canada-China relations went to court on Monday to fight extradition to the US, with her lawyers calling the accusations against her “fiction”.

Meng Wanzhou, the chief financial officer of tech giant Huawei and eldest daughter of its founder Ren Zhengfei, is wanted by US authorities for alleged fraud.

Meng did not comment as she rushed past protesters waving “Free Meng” and “Trump stop bullying us” placards outside the British Columbia Supreme Court.

Inside, she sat quietly, following the proceedings with the help of an interpreter.

Her attorneys in opening remarks rejected the fraud charges against Meng as “a fiction”.

“Sanctions drive this case,” lead defence lawyer Richard Peck said, as Meng’s husband Liu Xiaozong and Chinese consular officials looked on from a packed public gallery.

“Would we be here in the absence of US sanctions? Our response is no,” he said.

To secure her freedom, the “princess of Huawei,” must convince Judge Heather Holmes that the US charges would not stand up in Canada and are politically motivated.

The US alleges Meng lied to HSBC Bank about Huawei’s relationship with its Iran-based affiliate Skycom, putting the bank at risk of violating US sanctions against Tehran.

Meng has denied the allegations. She has been out on bail, living in one of her two Vancouver mansions for the past year.

Lawyers for Canada’s attorney-general on behalf of the US Justice Department have said they will justify extradition by arguing that the US accusations against Meng would be considered a crime in Canada if they had occurred here – a key test known as double criminality.

On Monday, her defence team began arguing that her misrepresentations, if they occurred, do not amount to fraud, and that Canada had not matched the US sanctions against Iran.

“The US has cast [Meng’s] alleged behaviour as a fraud against a bank. This is an artifice,” Peck told the court.

“This case is founded on allegations of breach of US sanctions, which Canada has repudiated,” he said, adding that Canada was effectively being asked “to enforce US sanctions”.

He also argued that HSBC would not be prosecuted in Canada for unwittingly breaking the sanctions and so Meng’s actions caused no harm under its fraud definition.

In court documents, the Crown asserted that Huawei controlled the operations of Skycom in Iran, that its staff used Huawei email accounts and security badges, and its bank accounts were controlled by Huawei.

But Meng told HSBC executives in a presentation in 2013 that Huawei no longer owned Skycom and that she had resigned from that company’s board.

From 2010 to 2014, HSBC and its American subsidiary cleared more than $100 million worth of transactions related to Skycom through the US.

Earlier, China’s foreign ministry called Meng’s extradition case a “grave political incident” and urged Ottawa to release the Huawei executive to normalise relations.

Canadian Deputy Prime Minister Chrystia Freeland responded that Ottawa “honors its extradition treaty commitments” and will not interfere in the case.

In a statement, Huawei said it trusts Canada’s judicial system and believes Meng will be found innocent.

Meng’s arrest during a stopover of a Hong Kong-to-Mexico flight in December 2018 put the 47-year-old at the centre of the US and China’s battle over the technology giant’s growing global reach.

It also stuck Canada in the middle of a trade row between the world’s two largest economies, resulting in China restricting agricultural imports from Canada.

Days after Meng was taken into custody, China arrested two Canadians on what Canada said were vague and trumped-up charges of “harming national security”.

China’s “arbitrary detentions,” according to Ottawa, of former Canadian diplomat Michael Kovrig and businessman Michael Spavor have been widely interpreted as retribution by Beijing aimed at pressuring Canada to free Meng.

The hearing in Vancouver is scheduled to last five days.

But if the US accusations are found to also be a crime in Canada, a further phase will follow in June, with the defence arguing that authorities conspired to nab Meng as part of a “covert criminal investigation”.

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