VANCOUVER, British Columbia (CN) – Huawei CFO Meng Wanzhou’s defense lawyers told a judge in British Columbia on Tuesday that the Canadian government is wrongfully relying on U.S. sanctions law and misapplying domestic fraud laws in its effort to extradite the Chinese telecom executive to the United States.
Nearly a year after her arrest at Vancouver International Airport, Meng remains on house arrest – accused by the United States of defrauding HSBC and putting the international bank at risk by duping it into violating U.S. sanctions against Iran.
In the second day of submissions at Meng’s extradition hearing Tuesday, lawyer Scott Fenton told Associate Chief Justice Heather Holmes that the position of the Canadian attorney general is an “extraordinary use of the instrument of fraud,” because the bank HSBC would not face any “legal risk” in Canada for violating U.S. sanctions on Iran.
“In every other fraud case I’m aware of, risk is a byproduct of fact,” Fenton told Holmes. He said Meng’s alleged misrepresentation to HSBC made the financial institution an “innocent victim of a misrepresentation,” which would not expose it to criminal or civil sanctions in Canada.
“All risk is predicated on legal liability under U.S. sanctions laws,” Fenton said. “All risk is derived from sanctions risk.”
Fenton highlighted the obscurity of the case against Meng, calling it “unusual” and “peculiar” and far from a “garden variety” fraud case where economic or financial loss is directly and unquestionably caused by misstatements or deceptive acts. He said HSBC would face no penalty in Canada for processing transactions involving Iran in the absence of Canadian sanctions. While the U.S. claims Meng misrepresented Huawei’s relationship with a subsidiary to maintain the company’s relationship with the financial institution, the misrepresentation would not amount to a fraud case in Canada, he said.
“You must apply Canadian law,” Fenton said, adding judges in extradition cases must consider the conduct of an accused person as a whole and avoid prosecutor’s attempts to “cherry pick” in order to prove double criminality. Meng’s conduct, when considered in the Canadian context, would not result in a viable fraud prosecution, he said. In fact, prosecuting such a case would violate the “golden rule” that “the innocent should not be punished.”
“This is a unique case because the risk of economic deprivation arises solely from the operation of foreign penal law for which no Canadian corresponding penal law exists. That is why there is no double criminality. It is not a question of sufficiency, it is a question of law,” Fenton concluded.
The hearing continues Wednesday with submissions from Canadian prosecutors.
During Monday’s proceedings, Meng’s attorney Richard Peck told the judge that while extradition proceedings for crimes such as murder, robbery or sexual offenses are straight-forward, “sanctions laws are different,” he said – temporary measures to force compliance from the sanctioned state.
“Once compliance has been obtained or reached, these temporary laws are removed from the books,” Peck said, adding that Canada removed sanctions on Iran in 2016, including a prohibition on financial services identical to current U.S. sanctions.
In Meng’s case, Peck said Canada has been enlisted “to enforce the very sanctions we have repudiated.”