Canada prosecutor says essence of Huawei CFO case is fraud

January 12, 2020

VANCOUVER, British Columbia (AP) – Canada’s Department of Justice said Friday the allegation against a top Chinese executive arrested at the United States’ (US) request would be a crime in Canada and she should be extradited to the US on fraud charges.

Canada arrested Huawei chief financial officer Meng Wanzhou, the daughter of Huawei’s founder, in December 2018 in a case that sparked a diplomatic furor among the three countries and complicated high-stakes US-China trade talks.

China detained two Canadians in apparent retaliation for the arrest Meng. The Canadian justice department said in court documents ahead of the start of her extradition hearings on January 20 that the Meng allegations meet the crucial extradition test of “double criminality,” meaning that if they had occurred in Canada they would be criminal under Canadian law.

Washington accuses Huawei of using a Hong Kong shell company to sell equipment to Iran in violation of US sanctions. It says Meng and Huawei misled HSBC bank about the company’s business dealings in Iran.

“Simply put, there is evidence she deceived HSBC in order to induce it to continue to provide banking services to Huawei,” said the Justice Department in the court documents released on Friday.

Her legal team has argued the alleged misrepresentations do not amount to fraud and say the case is really about the US trying to enforce its sanctions against Iran even though Canada has no such sanctions.

However, lawyers for the Department of Justice said in the court documents that Meng’s alleged conduct put the bank at risk of economic loss and is sufficient to make a case of fraud in Canada.

The Huawei chief financial officer denies the allegations and is free on bail, living in one of her two multi-million-dollar homes in Vancouver, ahead of a hearing set to begin on January 20 that will focus on the double-criminality test. It is expected to last five days.

If the judge rules the test has not been met, Meng will be free to leave Canada, though she’ll still have to avoid the US if she wants to evade the charges. If the judge finds there is double criminality, the hearing will proceed to a second phase.

The second phase, scheduled for June, will consider defence allegations that the Canada Border Services Agency, the Royal Canadian Mounted Police and Federal Bureau of Investigation conspired to conduct a covert criminal investigation at the airport.

A man browses his smartphone outside a Huawei store at a shopping mall in Beijing. Washington accuses Huawei of using a Hong Kong shell company to sell equipment to Iran in violation of US sanctions. PHOTO: AP