A Canadian Supreme Court judge on Wednesday ruled against Meng Wanzhou, chief financial officer for Huawei Technologies, who is battling extradition to the United States on charges related to the Chinese high-tech giant’s dealings with Iran.
Associate Chief Justice Heather Holmes ruled in Vancouver, British Columbia, that the charges against Ms. Meng, the daughter of Huawei founder Ren Zhengfei, would be considered a crime if they occurred in Canada and therefore the U.S. extradition request was valid.
Ms. Meng was arrested by Canadian authorities on Dec. 1, 2018, as she prepared to travel to South America for a meeting with Chinese President Xi Jinping. Her lawyers unsuccessfully argued that she should be freed since the crimes the Trump administration has accused her of were not illegal in Canada.
Chinese negotiators in recent months had sought to convince U.S. officials to drop the charges against Ms. Meng, considered a Chinese “princeling” and one of her country’s best-known tech executives, in talks that resulted in the landmark U.S.-China trade deal reached in January, according to U.S. officials.
The case has also proved a massive political and legal dilemma for the government of Prime Minister Justin Trudeau, involving Canada’s two biggest trading partners.
The court’s ruling — which means Ms. Meng must remain in Canada as the extradition battle proceeds — provides new details of the U.S. case against Ms. Meng, including the banking relationship between Huawei and the British bank HSBC.
The court found that Ms. Meng as Huawei chief financial officer in statements to HSBC in 2013 significantly understated her company’s relationship with Skycom Tech. Co. Ltd., a Huawei front company operating in Iran. The Huawei-HSBC ties, lasting from 2007 to 2017, included some $3.9 billion in loans and lines of credit from HSBC to Huawei between 2013 and 2015 alone.
HSBC had been sanctioned for dealings with Iran that violated U.S. sanctions. Bank officials questioned Ms. Meng about Huawei’s ties to Skycom after Reuters reported dealings between the two companies in Iran.
During a meeting in the back room of a Hong Kong restaurant in 2013, Ms. Meng told HSBC bank representatives that the Reuters story was wrong and that Huawei had no financial dealings with Iran through Skycom. The U.S. indictment states that in fact Huawei had close ties to Skycom, including joint employees.
Ms. Meng also falsely assured HSBC that Huawei’s financial dealings in Iran did not violate U.S. sanctions, the Canadian ruling said.
Judge Holmes noted in her ruling that if Ms. Meng had made similar false statements to a bank in Canada, it would have constituted prosecutable fraud. It thus met the “double criminality” standard to allow the U.S. request to go forward, the judge held.
The case has strained U.S.-China relations and Chinese state-run media this week have threatened unspecified retaliation if Canada failed to free Ms. Meng. Following Ms. Meng’s detention, Chinese security authorities detained two Canadians, businessman Michael Spavor and former diplomat Michael Kovrig, in apparent retaliation.
China’s Ottawa embassy slammed Wednesday’s ruling as a “grave political incident,” and said Canada had bowed to American pressure.
“The purpose of the United States is to bring down Huawei and other Chinese high-tech companies, and Canada has been acting in the process as an accomplice of the United States,” the embassy statement said.
Huawei’s Canada subsidiary said in a statement it was “disappointed” in the court’s ruling, adding, “We expect that Canada’s judicial system will ultimately prove Ms. Meng’s innocence.”
Huawei, one of China’s few global high-tech companies and a leader in the market to establish new national next-generation 5G information networks, has been sanctioned by the Trump administration several times, most recently when the company was placed on a Commerce Department list that bans most U.S. exports to the telecommunications giant.
The Trump administration has said Huawei is a state-owned Chinese company masquerading as a private firm that is seeking to corner the international market on 5G telecommunications technology.
The administration also has said Huawei is subject to Chinese intelligence laws requiring the company to make its equipment available for government eavesdropping and data collection.
Ms. Meng will get a second chance to argue for her release at a hearing next month on whether her rights were violated during her arrest by Royal Canadian Mounted Police at the Vancouver airport in December 2018.