VANCOUVER, British Columbia (CN) — Submissions by U.S. authorities in the extradition case of Huawei CFO Meng Wanzhou provided an “egregiously misleading summary” of a now infamous PowerPoint presentation given by the embattled Chinese telecom executive in 2013, Meng’s lawyers told a Canadian judge Monday.
Nearly two years after her arrest, Meng returned to a Vancouver courtroom in the latest round of her fight against extradition to the United States on charges of defrauding banking giant HSBC. Her defense team told British Columbia Supreme Court Justice Heather Holmes that HSBC was put on “full notice” of potential sanctions risks related to Huawei Technologies’ business with Iranian affiliate Skycom during a presentation in Hong Kong in 2013 outlining the company’s trade compliance program.
In a sparsely attended hearing with seating limited by Covid-19 pandemic measures, lawyer Scott Fenton walked Justice Holmes through the defense team’s voluminous materials in the first of five days of so-called Vukelich hearings, which test the “air of reality” to allegations of abuse of process or constitutional violations, both familiar lines of attack for Meng’s lawyers who have continually claimed their client’s rights were violated during and after her arrest and detention at Vancouver Airport in December 2018.
Fenton told Holmes that the United States’ submissions contain enough misstatements and omissions about the case against Meng to either entitle her to the “blunt instrument” of staying the proceedings or excluding certain evidence against her. The requesting state’s record of the case, Fenton said, makes “a stronger case of alleged fraud than the true facts can support.”
Fenton focused on a PowerPoint presentation given to an HSBC executive, known as “Witness B,” in Hong Kong in 2013. Of 16 slides related to Huawei’s trade compliance activities, Fenton told Justice Holmes that the U.S. record and supplementary records of the case wrongfully and tellingly omit statements from the presentation where Meng told the banker of Huawei’s relationship with Skycom.
“It put HSBC on full notice that both Huawei and Skycom were doing business in Iran,” Fenton said. “This informed HSBC that if it chose to process any U.S. dollars relating to that commerce in Iran, through its U.S. subsidiary … it risked liability under U.S. sanctions laws.”
Fenton said the United States has a duty of “full, frank, and fair” disclosure yet what authorities have provided deprive the court of “essential context” of Meng’s presentation to HSBC. Prosecutors didn’t include details of a slide where Huawei’s relationship to Skycom was referred to as “controllable,” which he suggested was hidden from the court because it would “undermine” the theory that Meng — and by extension Huawei — meant to deceive the bank into potentially running afoul of U.S. sanctions laws.
“This goes, again, to the heart of the case,” Fenton said. “The court would never know or understand that the material disclosure was made.”
After a break, Holmes heard from Fenton about how Meng was far-removed from any decision by HSBC to process U.S. dollar transactions through its U.S. subsidiary after learning of Huawei’s relationship to Skycom in Iran.
“HSBC has the responsibility to decide how to process those U.S. dollars,” he said. “It could choose to take the risk, which apparently it did.”
“Huawei has no control over how HSBC processes those U.S. dollar transactions,” he added.
The bank was “solely in control of those decisions” on how to process Skycom’s U.S. dollar payments through its American subsidiary, he said, despite having a “risk-free” alternative system based in Hong Kong known as the Clearing House Automated Transfer System, or CHATS. The U.S. record of the case, however, does not include any information about HSBC’s options.
“This is one of the rare cases where there’s a breach of the duty of candor,” Fenton said.
While this week’s hearings will not delve into the merits of Meng’s abuse of process claims, they set the stage for three weeks of scheduled proceedings set for February.
On Tuesday, the court will hear from Meng’s lawyer Frank Addario, who told the court late Monday that the “fundamental flaw” in the case is that the U.S. incorrectly drew a “straight line” from Meng’s statements and the “risk of deprivation” to the bank. Moreover, the PowerPoint presentation given by Meng made it clear that Huawei was “tethered” to Skycom, contrary to the U.S. record of the case, making it “so unreliable or defective it should be disregarded.”
This past May, Holmes dealt Meng a blow when she found the alleged conduct met the crucial double-criminality standard, leaving the telecom executive and her legal team with one fewer option to challenge the extradition bid.