Huawei chief financial officer Meng Wanzhou, who is out on bail and remains under partial house arrest after she was detained last year at the behest of American authorities, carries an umbrella to shield herself from rain as she leaves her home to attend a court hearing, in Vancouver, Thursday, Oct. 3, 2019. THE CANADIAN PRESS/Darryl Dyck

Meng Wanzhou’s misrepresentations to bank would be crime in Canada: Crown

Huawei CEO denies allegations, ahead of a hearing on a double-criminality test

The Department of Justice says the allegations against Huawei executive Meng Wanzhou would be a crime in Canada and she should be extradited to the United States on fraud charges.

The department says in documents filed in B.C. Supreme Court that the allegations meet the crucial extradition test of “double criminality,” meaning if they had occurred in Canada they would be criminal under Canadian law.

The U.S. alleges Meng lied about Huawei’s relationship with its Iran-based affiliate Skycom to one of its bankers, HSBC, putting the financial institution at risk of violating U.S. sanctions against the country.

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

The Huawei chief financial officer denies the allegations and is free on bail, living in one of her two multimillion-dollar homes in Vancouver, ahead of a hearing set to begin Jan. 20 that will focus on the double-criminality test.

Her legal team has argued the alleged misrepresentations do not amount to fraud. It says the case is really about the U.S. trying to enforce its sanctions against Iran even though Canada does not have the same sanctions.

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

“To establish HSBC’s deprivation, there is no need to consider American sanctions law,” they say.

The documents say Huawei controlled the operations of its affiliate Skycom in Iran from at least 2007 to 2014. Skycom employees used Huawei email addresses and access badges and the company’s bank accounts were controlled by Huawei, the documents say.

At the same time, they say HSBC was Huawei’s most important international bank. HSBC and its U.S. subsidiary cleared more than US$100 million worth of transactions related to Skycom through the U.S. between 2010 and 2014, the Justice Department alleges.

It alleges that Meng met with a senior HSBC executive in 2013 and assured them in a PowerPoint presentation that Huawei no longer held a shareholding interest in Skycom and she had resigned from Skycom’s board. She also told them Huawei subsidiaries in Iran would not have business transactions with HSBC, the court documents say.

HSBC has a long-standing policy prohibiting relationships with Iran-based clients and processing Iran-related transactions through the U.S. to avoid exposure to American civil and criminal liability, the documents say.

“Had HSBC known of Huawei’s activities that breached American sanctions against Iran, HSBC would have re-evaluated its relationship with Huawei,” they say.

The bank risked fines and penalties for violating Iranian sanctions law by doing business with Skycom, both as a result of violating a previous deferred prosecution agreement and attracting additional penalties, the documents add.

The Department of Justice also says there is precedent for the court to consider a foreign legal context in a limited way in an extradition proceeding. Doing so would only reinforce the conclusion that the allegations meet the double-criminality test, it says.

“Consideration of American sanctions law only serves to assist this court to better understand why HSBC’s economic interests were at risk.”

Meng’s arrest at Vancouver’s airport on Dec. 1, 2018, has fractured Canada-China relations. Beijing detained two Canadians, Michael Kovrig and Michael Spavor, in a move widely seen as retaliation and restricted some imports including canola.

READ MORE: China-Canada relations hang in the balance as Meng extradition case to heat up

The double-criminality hearing starting Jan. 20 is scheduled for 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 U.S. if she wants to evade the charges.

Laura Kane, The Canadian Press

Like us on Facebook and follow us on Twitter

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Famed brother, Africa inspire Comox artist Monica Meyer Huisamen

She already sold several works since this week’s opening at Milano

Courtenay’s first privately-owned retail cannabis store now open

Courtenay’s first privately-owned retail cannabis outlet is open for business. La Pachi… Continue reading

Possibly stolen goods recovered by Comox Valley RCMP

Was your car broken into recently?

Herb Alpert tribute coming to Courtenay

One of the favourite Georgia Straight Jazz Society shows presented at Thursday… Continue reading

Check out a new future at career and education fair in Comox

Event today features booths from more than 40 employers and educational institutions

Comox Valley Beefs & Bouquets for the week of Jan. 21

Bouquets to and from the Adopt-a-Grandparent program; beef to people setting off fireworks

‘Presumptive case’ of coronavirus in Canada confirmed by Ontario doctors

Man in his 50s felt ill on his return to Canada from Wuhan, China

VIDEO: Drone footage shows extent of damage in Highway 4 rockslide

Tofino, Ucluelet still cut off from rest of the island, as crews work to repair roadway

People knowingly take fentanyl so make policy changes to reduce harm: B.C. study

Dr. Jane Buxton, an epidemiologist at the centre, says drug users need more resources,

‘My heart is going to bleed’: Bodies brought back to Canada following Iran plane crash

Remains of Sahar Haghjoo, 37, and her eight-year-old daughter, Elsa Jadidi, were identified last weekend

UBC grad and sister killed in Iran plane crash had bright futures ahead, close friend says

Asadi-Lari siblings Mohammad Hussein and Zeynab were two of 57 Canadians aboard downed Flight PS752

BCLC opens novelty bet on Harry and Meghan moving to the west coast

Meanwhile, real estate agency points to four possible homes for the family

Canada slips in global corruption ranking in aftermath of SNC-Lavalin scandal

The country obtained a score of 77, which places it at the top in the Americas

Most Read