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HomeBusinessSanctions vs. fraud: the lines are drawn in the battle over Meng Wanzhou’s extradition

Sanctions vs. fraud: the lines are drawn in the battle over Meng Wanzhou’s extradition


Bob Mackin


It is all about the sanctions, Meng Wanzhou’s lawyers said Jan. 20 in British Columbia Supreme Court.

After a Government of Canada lawyer handed the official extradition application to Associate Chief Justice Heather Holmes, Richard Peck began his arguments aimed at freeing the Huawei chief financial officer. Meng, who was arrested at Vancouver International Airport on Dec. 1, 2018, is wanted in the United States, where she faces charges that she defrauded HSBC in order to get around sanctions on Iran.

Richard Peck (Peck and Co.)

“One way that we could begin is by posing a question,” Peck told Holmes. “And that question is this: Would we be here in the absence of U.S. sanctions law?”

Peck said that the sanctions violation is the essence of the allegation against Meng. She is accused of lying to HSBC in 2013 about the relationship between Huawei and an affiliated company, SkyCom, which operated in Iran. That led the HSBC to clear U.S. dollar transactions through the U.S., putting the bank at risk of violating the U.S. sanctions law.

“In that scenario, HSBC is a victim,” Peck said. “Canadian law no longer has sanctions against Iran and Canadian law governs this process… Our laws do not punish innocent victims, hence the HSBC could never be at risk of economic deprivation in Canada.”

If the judge agrees with Peck that the fraud charge would not apply in Canada, then Meng would be freed. But the Canadian government lawyers, who will also make their case during the scheduled four-day hearing, say that the case is about fraud charges, not sanctions, and Meng should remain in Canada on bail, while her extradition case proceeds.

“This extradition has every appearance of the U.S. seeking to enlist Canada to enforce the very sanctions which we have repudiated,” Peck said.

Meng Wanzhou leaving the Law Courts on Sept. 23 (Mackin)

That is where it gets complicated. Canada lifted sanctions in 2016 against Iran, along with the U.S. and other countries, who reached the Joint Comprehensive Plan of Action Respecting Iran (JCPOA) accord. But, the alleged offence committed by Meng took place in 2013 when both Canada and U.S. had sanctions against Iran that covered the financial services industry.

Eric Gottardi, another of Meng’s lawyers, called HSBC an “unwitting dupe” and said that Canadian fraud law differs from the U.S., because Canada requires an actual loss or risk of deprivation.

The scheduled four-day hearing is in the biggest, most-secure courtroom at the Law Courts in Vancouver. The room, with a 149-seat gallery, was built for $7.2 million in 2001 for the trial of persons accused in bombing an Air India flight in 1985. It was also the scene of a 2007 trial to decide ownership of the NHL’s Vancouver Canucks and Rogers Arena, after a dispute among three real estate tycoons who were originally planning a joint bid.

Meng was in a happy mood throughout the day. During the mid-afternoon recess, she emerged from the glass-encased area of the courtroom to visit with about 20 people in the far left corner. She led them to the hallway outside where they partook in small talk. One of them men in the group told that they were Huawei workers from the company’s Shenzhen headquarters.

Students protested in favour of freeing Meng Wanzhou. (Mackin)

Before the hearing began, outside the Nelson Street entrance, Uyghur Muslims protested China’s jailing of more than a million people in Xinjiang. Outside the Smithe Street entrance, the one used by Meng to arrive with her court-appointed security guards, a group of local students carried similar signs urging an end to the extradition hearings.

Their signs said “Free Ms. Meng. Bring Michael home. Trump stop bullying us. Equal justice.”

Oddly, the signs mentioned “Michael,” in the singular.

China arrested two Canadian men named Michael, diplomat Kovrig and businessman Spavor, in apparent retaliation for Meng’s detention in December 2018. They languish in jail in China, cut off from their families and lawyers. Meng lives under a curfew in her Shaughnessy mansion which, coincidentally, is mortgaged by HSBC.

The message on the signs echoed a Globe and Mail guest commentary last week by Eddie Goldenberg, a lawyer with the Bennett Jones law firm who was the chief of staff to former Liberal Prime Minister Jean Chretien, who is now a lawyer with Dentons, an international law firm with offices throughout China. Goldenberg is the latest Liberal Party member to advocate for the Trudeau Liberal government to set a precedent and meddle in the case.

None of the students would tell their name or affiliation. One of them said he was unaware of the extradition treaty between Canada and the U.S. or the facts of the case. Another would not deny that the group was paid to appear outside the courthouse on the rainy Vancouver Monday morning. 

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