Evidence against Huawei executive Meng Wanzhou ‘unreliable,’ defence says

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Faulty evidence and false conclusions show why Huawei executive Meng Wanzhou should not be extradited to the United States to face a charge of fraud, her legal team told a B.C. court on Tuesday.

Wrapping up defence arguments, her lawyers faced the challenge that is ever-present in extradition hearings: The government needs only to show that, if the crime had been committed in Canada, there is enough evidence to send it on to trial.

In a legal proceeding that has brought Canada-China relations to their lowest ebb in decades – Ms. Meng’s 2018 arrest in Vancouver was quickly followed by the detention of two Canadians in China – the defence team said the case was implausible, the evidence unreliable and the explanation of the law of fraud inaccurate.

“The question you now have to decide,” lawyer Eric Gottardi told Associate Chief Justice Heather Holmes of the B.C. Supreme Court, “is whether the evidentiary record ... still amounts to a plausible case. Could a jury convict to the criminal standard [beyond a reasonable doubt] on the evidence before you? We say the answer is no.”

He said the U.S. sought to bridge gaps in its evidence against Ms. Meng “with educated guesses and speculation. We would say fundamental justice demands that Ms. Meng not be extradited to face charges on these legally and factually flawed allegations. Accordingly, we would ask you to discharge her.”

It was the third day of defence arguments on the evidence for extradition, a sharp contrast to the proceedings in China, in which trials on national-security charges against Canadians Michael Spavor and Michael Kovrig took roughly two hours each. On Wednesday, the Canadian government, which is presenting the U.S. case for extraditing Ms. Meng, will have an opportunity for a final say.

Meng’s lawyers say fraud case unlike any other in Canadian legal history

A great deal turns on the judge’s ruling, expected to be months away. Observers believe the fate of Mr. Spavor and Mr. Kovrig is linked to Ms. Meng’s freedom. The two Canadians have been detained nearly 1,000 days. Another Canadian, Robert Schellenberg, is facing the death penalty in China, a sentence imposed only after Ms. Meng’s arrest. Ms. Meng is free on bail. If ultimately extradited, she could face years in prison if convicted.

The accusation against her is that, in a 2013 PowerPoint presentation to HSBC, she put the bank at risk of violating U.S. sanctions on Iran by misstating the relationship between Huawei Technologies Co. Ltd. and Skycom Tech Co. Ltd., both of which did business in Iran.

Skycom had paid a British company, Networkers, for technology work in Iran. Skycom made the payments in U.S. dollars, and HSBC in Britain (the bank used by Networkers) put the transactions through a U.S. branch – a violation of sanctions. (The Iranian sales on their own, done by non-Americans, were not violations unless U.S. bank subsidiaries and U.S. dollars were involved.)

Mr. Gottardi said the case relies on unreasonable inferences from the evidence. For example, the U.S. asserted that HSBC would have ended its money-making relationship with China’s biggest telecom company if not for Ms. Meng’s alleged falsehoods.

Yet senior HSBC employees “knew the true facts” of the Huawei-Skycom relationship, he said in a document filed in court on Tuesday, “and there is no evidence that any of this caused them any concern – quite the contrary.”

The U.S. was also wrong to infer that Ms. Meng had a criminal intent to mislead the bank, Mr. Gottardi said in the document. As for the government’s case that Ms. Meng had given false assurances in relation to transactions involving U.S. bank offices, she never discussed the issue. “It is unreasonable to infer that a sophisticated bank would rely on Ms. Meng’s non-representation for assurance about something the bank itself had exclusive control over,” the defence document said.

Mr. Gottardi cited several examples of what he called “manifestly unreliable” evidence: First, that Ms. Meng, far from denying that Skycom was controlled by Huawei, said the opposite – that Skycom was “controllable” by Huawei. Second, Huawei’s control of Skycom did not give rise to any risk of sanctions violations on the part of HSBC, according to a U.S. expert on sanctions law whose evidence the judge has admitted into the case record.

Third, that the terms of a 2012 deferred prosecution agreement that HSBC had entered into in the U.S. (in relation to sanctions violations and weak protections against money laundering) provided for liability only if the bank knowingly violated the U.S. sanctions. Being duped carried no risk, the document said.

Citing a 2006 ruling in which the Supreme Court set out the ground rules for judges, Mr. Gottardi told the judge that the Meng extradition hearing is exactly the kind of case former chief justice Beverley McLachlin warned against: extraditing in an implausible, manifestly unreliable case.

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