Canada court adjourns Huawei executive's extradition battle

Vancouver: The Canadian court tussle over the arrest of a Huawei telecoms executive was put in limbo Thursday when a judge adjourned the case that pits the United States against China.

Washington is seeking extradition of Huawei chief financial officer Meng Wanzhou, who was arrested in December 2018 during a flight stopover in Vancouver. 

Huawei has been effectively banned from the US, which insists the Chinese company is an espionage risk.

“I’m reserving judgement,” British Columbia Supreme Court Justice Heather Holmes said at the end of a four-day hearing.

Further hearings are scheduled for April, June and September on allegations of a conspiracy to arrest Meng - the eldest daughter of Huawei founder Ren Zhengfei - and to crush the Shenzhen-based Huawei.

If extradited, Meng would face US prosecution on charges of fraud linked to violations of sanctions against Iran.

Four days of legal arguments this week focused on whether the US charges would stand up in Canada, a key test for extradition.

Appeals by either side could also drag out the case - which has strained relations between the world’s two largest economies - for years.

Each morning of the hearing, Meng walked out of one of her two luxury homes where she is staying dressed in black business attire, with her tracking ankle-bracelet clearly visible.

She rarely cracked a smile in court and followed proceedings diligently, listening with an interpreter’s help, flipping through documents and stepping out during breaks to chat with her husband in the public gallery.

Revenge arrests in China?

Authorities allege that Meng lied to the HSBC bank about Huawei’s relationship with its Iran-based affiliate Skycom, putting the bank at risk of violating US sanctions.

Lawyers for Canada’s attorney general on behalf of the US Justice Department have argued that the case turns on misrepresentations in a 2013 presentation to bankers in Hong Kong.

Meng told HSBC executives that Huawei no longer owned Skycom and that she had resigned from its board.

The Crown said this was a deception.

It asserted that Huawei controlled the operations of Skycom in Iran and held its purse strings, citing as examples Skycom staff’s use of Huawei email accounts and security badges.

HSBC would go on to coordinate a USD$1.5 billion syndicated loan to Huawei, contributing US$150 million of its own funds, while its American branch cleared millions of dollars worth of transactions related to Skycom.

Had HSBC known of the alleged skirting of US sanctions against Iran it might have reassessed its ties to Huawei, Crown counsel Robert Frater said Wednesday.

Meng’s defense lawyers argued that Meng’s misrepresentations, if they occurred, do not amount to fraud, and that Canada repudiated the US sanctions against Iran.

“The international community has rejected the very sanctions that ground the accusations in this case,” said defense lawyer Eric Gottardi.

He accused the US of abusing its treaty with Canada by asking it to arrest Meng as part of a campaign against China’s largest international company.

As the case played out before a packed courtroom, a spy row between Canada and China has raged on.

Nine days after Meng was taken into custody China arrested two Canadians, former diplomat Michael Kovrig and businessman Michael Spavor.

Their detentions on espionage suspicions have been widely interpreted as retribution by Beijing.

China’s ambassador to Canada, Cong Peiwu, has said Meng’s release was a “precondition” for improved bilateral ties.

On Tuesday, however, Prime Minister Justin Trudeau rejected domestic calls to free Meng in a “prisoner swap” for Kovrig and Spavor.