VANCOUVER, British Columbia (CN) – The fate of Huawei CFO Meng Wanzhou is now in the hands of a Canadian judge, who reserved judgment Thursday on whether the telecom executive can be extradited to the United States on a raft of charges related to possible Iran sanctions violations.
In a hearing lasting less than an hour, British Columbia Supreme Court Justice Heather Holmes heard from Meng's lawyer Scott Fenton who argued prosecutors made submissions "irreconcilable" with the law of fraud. He said the Crown's claims that fraud could exist even if a misrepresentation caused "no possibility of loss" was an "oxymoron"
"No possibility of loss means no risk at all," Fenton said, adding that a "theoretical risk of loss" was insufficient to prove fraud as well.
Moreover, Fenton said that U.S. sanctions laid the foundation for the case against Meng, who if extradited, faces numerous charges in the U.S. for allegedly lying to an HSBC bank representative in a meeting in a Hong Kong restaurant in 2013. The meeting, the court heard over the course of four days, was orchestrated by Huawei to quell the bank's fears of violating a deferred prosecution agreement stemming from shady dealings in Libya, Sudan, and Burma. The fears arose after a Reuters report called Huawei out for doing banned business with Iran through its subsidiary Skycom.
Fears of violating sanctions, Fenton said, were the "exclusively underlying" concerns of the bank's risk committee, and the record of the case against Meng made "innumerable references" to the risk of sanctions.
"The requesting state filed a summary of the case in which all risk allegedly arising from the applicant's misrepresentation to HSBC was contingent on sanctions risk, specifically inducing HSBC to engage in U.S. dollar transactions related to commerce in Iran," Fenton said. "Sanctions risk exclusively drove economic risk to HSBC."
But, Fenton said, the U.S. "position has devolved" into claims the fraud was actually due to "reputational risk based on common sense, in the absence of any evidentiary foundation."
"This is wrong. The court is being embarrassed," Fenton said. "There can be no fraud here because all risk to HSBC is based on underlying U.S. sanctions risk, which cannot exist in Canada. "
He said the "essential element of deprivation," therefore, can't be proven.
Richard Peck, another member of Meng's defense team, then took over and highlighted the "points of departure" between the defense and prosecution on the "transposition exercise" in extradition cases. Peck said that while Canada did impose sanctions on Iran at one point, the country removed them in February 2016 "along with the rest of the civilized world" when it endorsed the Iran nuclear deal.
"A comparative legal obligation did exist in Canada. We had that same law. We, as a sovereign state, had imposed the very same sanction law on Iran, and then things changed," Peck said. "In May of 2018, the president of the United States decided that wasn't a good enough deal and he tore it up."
Peck said Canada chose not to follow suit and lifted the sanctions as a matter of "political law."
"The outlier was the United States, the applicant in this case," he said, adding that the extradition case against Meng is unique in several ways.
"It's unique because the risk of economic deprivation arises solely from a legal obligation that exists in the U.S. where Canada has expressly repudiated that," he said. "It's a pose or posture where fraud is being tendered as the essence and in face sanctions busting or sanctions violations, is the essence. That goes to the core of our submission as you know.”
He continued: “It's unique because the risk of deprivation is solely linked to the foreign penal law. It's unique because of the nature of sanctions law as opposed to the general law ... It's not the traditional law that extradition cases are fused with, the general law, the law that is common to nations. It's unique because of our repudiation of the very law upon which my learned friends depend. It's unique because our standards have changed with respect to this very issue. It's extraordinary in that sense. This is the kind of case that tests our system."
Justice Holmes then thanked both sides for their "high-caliber submissions" and reserved judgment before adjourning the hearing.
Meng has been under restricted release since shortly after her Dec. 1, 2018, arrest at the Vancouver International Airport. She has since sued the Canadian government, the Royal Canadian Mounted Police and Canada Border Services Agency claiming the arrest violated her constitutional rights. The civil case is ongoing.
The extradition case, which has already been going for nearly a year, could take months if not years to complete.