Lawyer for Huawei Exec Calls US Extradition Case ‘Manifestly Unreliable’

VANCOUVER, British Columbia (CN) --- Huawei CFO Meng Wanzhou’s battle against extradition to the United States on fraud charges continued Tuesday with her lawyers hoping to persuade the British Columbia Supreme Court to admit into evidence a dump of documents from HSBC bank they claim could turn the case “on its head.”

Having scored a victory in Hong Kong in April to have the bank hand over documents about its relationship with Huawei, her defense team had unsuccessfully sought a publication ban on the material. The company’s deal with the bank compelled Meng to seek to keep the documents confidential, but the Canada attorney general called the bid for a ban too broad, and Associate Chief Justice Heather Holmes agreed, though her judgment has remained under seal.

Meng’s lawyers had argued that the publication ban on the new documents would serve a dual purpose of preserving HSBC’s “privacy interests” while encouraging its “participation in the criminal justice process.”

Tuesday's hearing opened with the judge trying to clear up confusion over existing bans in place, such as publishing names of Huawei and HSBC employees other than Meng, while trying to hash out a process to release materials to the media. Meng’s extradition case has put unprecedented pressure on the Vancouver court registry amid massive international media interest and voluminous documentary evidence generated by the lengthy proceeding since her arrest in December 2018.  

Holmes then ordered a ban on publication of names or identifying information of individuals other than Meng’s that may come up in the hearing.

Mark Sandler, a member of Meng’s defense team appearing for the first time, told the court that documents they seek to admit as evidence show that specific statements in United States’ records of the case are “manifestly unreliable.” The bank’s own records, Sandler said, show that senior HSBC employees knew of the Huawei’s control over its one-time subsidiary Skycom, which operated in Iran during a period covered by U.S. sanctions. He said Skycom employees had Huawei email addresses and employee badges, used Huawei letterhead, and the closure of accounts at the bank demonstrated how HSBC sought to “mitigate its reputational risk.”

Sandler said it was rare that an extradition target in a fraud case would use the purported victim’s own records to bolster their case against committal. Admitting the bank’s records into evidence, he said, would show that the U.S. records of the case omitted key information about who was “in the know” at the bank regarding its relationship with Huawei and its Iranian affiliate.

Calling essential elements to prove a fraud occurred “fatally implicated” by the new evidence, Sandler said the U.S. narrative of the case includes “patently false” assertions that are contradicted by the bank’s own records.

“The record must be corrected,” Sandler said.

The American case against Meng is “tethered” to the notion that only junior employees knew about Huawei’s control over Skycom, even after reporting by Reuters put the bank “on notice” of the company’s potential sanctions violations through its operations in Iran. Moreover, documents disclosed by HSBC show senior executives, including those making the decision to continue the banking relationship with Skycom, show they knew Huawei controlled the company, its bank accounts and its operations. He said the new evidence, if admitted, would provide crucial context about how the bank decided to rely on statements made by Meng to its potential detriment.

However, Holmes warned Sandler that context alone wouldn’t necessarily move her to admit the new evidence. Sandler then stepped aside, allowing Meng’s lawyer Scott Fenton to walk the court through the specifics of the U.S. record of the case, known as the ROC, he says are undermined by the new evidence, including email chains showing HSBC analysts forwarding the Reuters article that first set off the controversy. Certain paragraphs in the U.S. record don’t disclose that senior HSBC employees knew of Huawei’s affiliation with the Iranian subsidiary, Fenton said, but rather make a false distinction between the bank’s junior and senior employees to make it appear that only low-level people were “in the know.”

“HSBC’s own relationship team considered and described Skycom as a Huawei affiliate,” Fenton said. “Again, the requesting state was in possession of this email. It did not choose to disclose any of the contents … The full emails are realistically capable of showing that these paragraphs are manifestly unreliable in building this junior-senior schism.”   

Canadian authorities arrested Meng at the Vancouver International Airport in December 2018, setting off a now years-long process to have her sent to the U.S. to face fraud charges in New York. The telecom executive and daughter of the company’s founder denies the charges, fighting the extradition bid on multiple legal fronts in Canada, the U.S., and Hong Kong.

At the heart of the charges is a now infamous meeting between Meng and an HSBC executive in Hong Kong in 2013 after Reuters published articles about a Huawei subsidiary doing banned business in Iran while under U.S. sanctions. It was a PowerPoint presentation given by Meng at the meeting that was meant to placate the bank’s fears about violating sanctions by doing business with Skycom and clearing transactions through the U.S. financial system. At the time, HSBC itself was under a deferred prosecution agreement with the U.S. Department of Justice.

The hearing into the new HSBC evidence continues Thursday, while the home stretch of the extradition proceeding is set to begin in August.

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