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Meng Wanzhou extradition hearings finally begin, with defence blasting fraud case against Huawei CFO as 'fiction'

Ian Young in Vancouver

The formal extradition hearings that will help decide the fate of Huawei executive Meng Wanzhou got under way in Vancouver on Monday, more than a year after her arrest, in a case that has infuriated Beijing and symbolises challenges to the geopolitical order posed by China's rise.

Meng, Huawei's chief financial officer and daughter of founder Ren Zhengfei, appeared behind two layers of bulletproof glass in the high-capacity, high-security courtroom 20 of the British Columbia Supreme Court complex.

Meng Wanzhou is greeted by a member of her security as she leaves her home to attend the start of her extradition hearing in Vancouver on Monday. Photo: Reuters alt=Meng Wanzhou is greeted by a member of her security as she leaves her home to attend the start of her extradition hearing in Vancouver on Monday. Photo: Reuters

Meng's lawyer Richard Peck commenced his arguments by asserting that Meng should be released if the case against her could not support the allegations of fraud, under the extradition test of "double criminality".

"It is a fiction," that the US has any interest in policing interactions "between a private bank and a private citizen halfway around the world", Peck said, referring to a 2013 meeting between Meng and a HSBC executive in Hong Kong to discuss Huawei's business dealings in Iran, an interaction that lies at the heart of the case. "It's all about sanctions."

Meng was arrested at Vancouver's international airport on December 1, 2018, during a stopover from Hong Kong, on an arrest warrant requested by the United States. US authorities want Meng to face trial in New York, accusing her of bank fraud related to alleged breaches of US sanctions on Iran by Huawei.

The case against Meng is being seen as a key moment in China's relations with the West, coming amid the US-China trade war and a worldwide debate about whether to allow Huawei to participate in the construction of high-speed 5G networks that will shape the internet.

The ankle monitor of Meng Wanzhou is visible as she leaves her home on Monday. Photo: Reuters alt=The ankle monitor of Meng Wanzhou is visible as she leaves her home on Monday. Photo: Reuters

It has also sent relations between Beijing and Ottawa into a deep freeze, with China arresting Canadians Michael Kovrig and Michael Spavor for alleged espionage. But their arrests 13 months ago were widely seen in the west as retaliation for Meng's detention.

Meng's appearance on Monday was a far cry from the last time she was in courtroom 20, when she was dressed in a green prison tracksuit for the December 2018 bail proceedings that resulted in her being released on a C$10 million (US$7.7 million) surety.

In the first order of business, Justice Heather Holmes allowed Meng and her translator to move out of the defendant's box to sit at her lawyers' table.

Subsequent hearings, preliminary to the main case, were shifted to smaller courtrooms, but on Monday, she returned to courtroom 20 dressed in a smartly tailored polka dot dress and Manolo Blahnik pumps with a crystal buckle, her hair pulled back in a silver pin. During the morning break in proceedings, Meng mingled in the gallery and chatted with China's deputy consul-general in Vancouver, Wang Chengjun.

The 156-seat courtroom 20, built 17 years ago for a terrorism trial surrounding the 1985 bombing of an Air India flight, overflowed with journalists and spectators standing in the aisles.

The Canadian hearings are not a trial to decide Meng's guilt or innocence. Instead, Justice Holmes must decide whether the case merits Meng being sent to the United States to face trial.

This week's hearings are to address claims by Meng's lawyers that the case against her fails the test of "double criminality", the requirement that charges in an extradition case must be capable of representing an offence in Canada, as well as the requesting state.

Her lawyers say the underlying case against her is breaching US sanctions on Iran, which is not a crime in Canada. But the Canadian government lawyers representing the US in the hearings have said the underlying case is fraud.

Meng is accused of lying to HSBC in her 2013 meeting about Huawei's relationship with Skycom, an affiliate that was doing business in Iran. Meng's PowerPoint presentation to the HSBC executive in a Hong Kong teahouse are said to have resulted in transactions that put the bank at risk of breaching US sanctions.

Meng Wanzhou, chief financial officer of Huawei Technologies, arrives at for an extradition hearing in Vancouver on Monday. Photo: Bloomberg alt=Meng Wanzhou, chief financial officer of Huawei Technologies, arrives at for an extradition hearing in Vancouver on Monday. Photo: Bloomberg

US sanctions were the essence of Meng's alleged conduct at the core of the case, said another of her lawyers, Eric Gottardi.

"It's why the US cares about what was said in the back of a restaurant in August 2013," he said, referring to the teahouse meeting. "It all comes back to sanctions."

Gottardi said the teahouse meeting was "the only act" attributed to Meng in the US case against her, and that if US sanctions law was removed from consideration "there's nothing left ... that evinces a risk to HSBC."

He said that HSBC was depicted as having been "duped" by Meng " yet at the same time, the bank would have needed to act deliberately to face any risk of liability for breaching US sanctions on Iran. If Meng was deceiving HSBC, no such risk of "wilful violations" existed, he said, thus negating Meng's alleged fraud.

Media photograph a vehicle driving Huawei Chief Financial Officer Meng Wanzhou from her home to attend the start of her extradition hearing in Vancouver on Monday. Photo: Reuters alt=Media photograph a vehicle driving Huawei Chief Financial Officer Meng Wanzhou from her home to attend the start of her extradition hearing in Vancouver on Monday. Photo: Reuters

Justice Holmes asked Gottardi whether it was reasonable for the US sanctions to be considered "in isolation" as inapplicable under Canadian law, instead of in the broader context of the case.

"The source of deprivation [to HSBC] evaporates in the Canadian context," Gottardi responded.

The double criminality phase of the hearing will continue until at least Thursday and possibly Friday, with further court dates pencilled in until November. But the case could stretch beyond that, with some extradition proceedings lasting years.

Other phases of the hearing this year are scheduled to consider whether Meng was subjected to an abuse of due process when she was arrested and questioned at Vancouver's airport, as well as accusations that the case is politically motivated.

Her lawyers have pointed to comments by US President Donald Trump that he might intervene in her case if it was to the economic advantage of the US.

Meanwhile, Meng is living in Vancouver in a C$13.6 million (US$10.4 million) mansion that she owns. She is under the guard of a private security team, and must wear a GPS tracker on her ankle, abide by a curfew and stay away from the airport.

On Monday, a spokesman for China's foreign ministry repeated calls for Meng to be immediately released, calling her arrest arbitrary and a "serious political incident".

In a message posted on social media after the start of Monday's hearing, Huawei said: "We trust in Canada's judicial system which will prove Ms Meng's innocence. Huawei stands with Ms Meng in her pursuit for justice and freedom."

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This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.