This week's hearings deal with the question of whether the U.S. charges against Meng Wanzhou are crimes in Canada as well. Her lawyers argue the case is really about U.S. sanctions against Iran, not a fraud case. They maintain since Canada does not have similar sanctions against Iran, no fraud occurred.
Washington accuses Huawei of using a Hong Kong shell company to sell equipment to Iran in violation of U.S. sanctions. It says Meng, 47, committed fraud by misleading the HSBC bank about the company's business dealings in Iran.
“Lying to a bank in order to get banking services that creates a risk of economic prejudice is fraud,” Canadian Department of Justice lawyer Robert Frater told Justice Heather Holmes. “Your job is to determine if there is evidence before you capable of amounting to some evidence of fraud.”
Canada arrested Huawei's chief financial officer and the daughter of its founder in December 2018 in Vancouver as she was changing flights at America's request. Beijing views Meng's case as an attempt to contain China's rise. Huawei represents China's progress in becoming a technological power and has been a subject of U.S. security concerns for years.
Her lawyers say even if Meng made false statements to HSBC, the bank would not have faced any risk in Canada due to the absence of sanctions. But Frater argued among other things, Meng’s misrepresentations put HSBC reputation at risk for dealing with Iran.
“Businesses worry about their reputation because a bad reputation can lead to economic loss,” he said. He said the U.S. sanctions were the reason for the meeting with the bank, but it was the alleged misrepresentation that matters to the United States.
Meng, who is free on bail and living in one of the two Vancouver mansions she owns, sat next to the court interpreter. She listened to the proceedings with her head down studying documents. Meng denies the U.S. allegations. The U.S. Department of Justice has stressed that Meng's case is separate from the wider China-U.S. trade dispute.
Huawei is the biggest global supplier of network gear for cellphone and internet companies. Washington is pressuring other countries to limit use of its technology, warning they could be opening themselves up to surveillance and theft.
The first phase of the extradition hearing is expected to last through the end of the day on Thursday. The second phase, scheduled for June, will consider defense allegations that Canada Border Services, the Royal Canadian Mounted Police and the FBI violated Meng's rights while collecting evidence before she was actually arrested.
In apparent retaliation for Meng's arrest, China detained former Canadian diplomat Michael Kovrig and Canadian entrepreneur Michael Spavor. China has also placed restrictions on various Canadian exports to China, including canola oil seed and meat. Last January, China also handed a death sentence to a convicted Canadian drug smuggler in a sudden retrial.