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Huawei CFO’s Extradition Fight Tests Canada’s Legal System

Natalie Obiko Pearson

(Bloomberg) -- Canada’s arrest of Meng Wanzhou 13 months ago at the behest of the U.S. brought to a halt the once-frenetic life of Huawei Technologies Co.’s chief financial officer who traveled so frequently she went through seven passports in a decade.

Meng’s limbo continues as she fights against extradition to New York. Her first hearing in a Canadian court ended Thursday with no immediate ruling.

The high-profile case -- triggered by her 2018 arrest during a stopover at Vancouver airport -- has triggered an unprecedented diplomatic crisis and plunged Canada-China relations into their darkest period in decades. Meng, 47, is the eldest daughter of Ren Zhengfei, the billionaire founder of China’s biggest telecommunications company.

Proceedings this week had focused on whether her case meets a crucial test of Canadian extradition law: would her alleged U.S. offense have also been a crime in Canada?

The outcome could offer Meng her first shot -- however slim -- at release. If the judge rules her case doesn’t meet the double-criminality test, she could be discharged.

“This is the kind of case that tests our system,” Richard Peck, one of Meng’s defense lawyers, told the court in closing arguments Thursday.

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The U.S. is seeking Meng’s handover on fraud charges, accusing her of lying to HSBC Holdings Plc to trick it into conducting transactions that violated U.S. restrictions on doing business with Iran.

The defense has argued the U.S. deliberately framed the case as fraud to make it easier to extradite Meng but that in reality it’s a sanctions-evasion complaint. On that basis, it fails the double criminality test because Canada doesn’t have sanctions on Iran, it says.

Canada made a sovereign decision to remove sanctions in 2016 “along with the rest of the civilized world,” Peck argued, describing the U.S. as an “outlier” that’s pressuring Canada to enforce a policy it has expressly repudiated.

“It’s a political law,” Peck told the court. “It’s not the traditional law that extradition cases are fused with, the general law, the law that is common to nations.”

The prosecution didn’t speak Thursday but has disputed the foundation of her defense. “Fraud, not sanctions violations, is at the heart of this case,” prosecutor Robert Frater told the court on Wednesday. “Lying to a bank in order to get banking services that creates a risk of economic prejudice is fraud.”

Associate Chief Justice Heather Holmes didn’t say when she expects to issue her decision. Of the 798 U.S. extradition requests received since 2008, Canada has only refused or discharged eight, according to the Justice Department. Another 40 cases were withdrawn by the U.S.

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If the judge rules that the case fails the double-criminality test, Canada’s attorney general would have the right to appeal within 30 days. But in theory, Meng could be on a plane back to China well before that, according to Gary Botting, a Vancouver-based lawyer who’s been involved in hundreds of Canadian extradition cases.

Meng, also known as Sabrina and Cathy, has become the highest-profile target of a broader U.S. effort to contain China and its largest technology company, which Washington sees as a national security threat. She has been out on bail living under house arrest, currently at her C$14 million ($10.7 million) mansion just two doors down from the U.S. consul general’s residence in a tony Vancouver neighborhood.

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She’s become a national cause for Beijing, which sees the U.S. case as politically motivated and accuses Canada of “arbitrary detention.” China detained two Canadians -- Michael Spavor and Michael Kovrig -- within days of her arrest and has halted billions of dollars worth of Canadian imports.

Canadian Prime Minister Justin Trudeau has resisted pressure to intervene in the case, saying Canada will abide by the rule of law and allow the courts to come to an independent decision. U.S. President Donald Trump, however, has muddied Meng’s case and undermined Canada by suggesting that he might try to intervene in Meng’s case if it would boost a China trade deal.

In later hearings, Meng’s defense is expected to cite Trump’s comment to argue that her case is politicized and she should be freed. The next hearings are scheduled to begin April 27.

To contact the reporter on this story: Natalie Obiko Pearson in Vancouver at npearson7@bloomberg.net

To contact the editors responsible for this story: David Scanlan at dscanlan@bloomberg.net, Peter Blumberg, Anthony Lin

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