Canada judge rules Huawei CFO's extradition case can proceed

VANCOUVER, British Columbia (AP) - A Canadian judge ruled Wednesday the U.S. extradition case against a senior Huawei executive can proceed to the next stage, a decision that is expected to further harm relations between China and Canada.

The Chinese embassy in Ottawa later warned Canada to drop the case and accused the United States of trying to bring down the Chinese tech giant.

Canada arrested Meng Wanzhou, the daughter of Huawei's founder and chief financial officer of the company, at Vancouver's airport in late 2018. The U.S. wants her extradited to face fraud charges. Her arrest infuriated Beijing. Canadian officials have emphasized the country's judicial system is independent.

Associate Chief Justice Heather Holmes said in her decision the allegations against Meng could constitute a crime in Canada as well and the extradition could therefore proceed.

The U.S. accuses Huawei of using a Hong Kong shell company to sell equipment to Iran in violation of U.S. sanctions. It says Meng, 48, committed fraud by misleading the HSBC bank about the company's business dealings in Iran.

Meng's lawyers argued during a hearing in January that the case is really about U.S. sanctions against Iran, not a fraud case. They maintain that since Canada does not have similar sanctions against Iran, no fraud occurred under its laws. The judge disagreed.

'œMs. Meng's approach to the double criminality analysis would seriously limit Canada's ability to fulfill its international obligations in the extradition context for fraud and other economic crimes," Holmes wrote.

Holmes said Canada did not have economic sanctions against Iran at the time but noted the sanctions used by the U.S. 'œwere not fundamentally contrary to Canadian values."

Her legal team is scheduled to be back in court June 3 to set dates for when her lawyers will argue that Canada Border Services, the Royal Canadian Mounted Police and the FBI violated Meng's rights while collecting evidence before she was actually arrested. Extradition cases typically take years in Canada.

The ruling against Meng is expected to erode already damaged relations between Beijing and Ottawa.

'œChina hereby expresses strong dissatisfaction and firm opposition to this decision, and has made serious representations with Canada,'ť the Chinese embassy in Ottawa said in a statement.

'œThe 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."

Çhina's embassy also warned Canada to 'œimmediately release Ms. Meng Wanzhou to allow her to return safely to China, and not to go further down the wrong path.'ť

In apparent retaliation for Meng's arrest, China detained former Canadian diplomat Michael Kovrig and Canadian entrepreneur Michael Spavor. China has also placed restrictions on various Canadian exports to China, including canola oil seed. China also handed a death sentence to a convicted Canadian drug smuggler in a sudden retrial.

Huawei is the biggest global supplier of network gear for phone and internet companies and some analysts say Chinese companies have flouted international rules and norms amid allegations of technology theft. The company represents China's progress in becoming a technological power and has been a subject of U.S. security and law enforcement concerns.

'œThe United States thanks the Government of Canada for its continued assistance pursuant to the U.S./Canada Extradition Treaty in this ongoing matter,'ť The U.S Department of Justice said in a statement.

Ahead of the decision, Meng posed for photos on the court steps this past weekend, giving a thumbs up sign. She showed up to court on Wednesday wearing a black dress and wearing an ankle bracelet.

'œHuawei is disappointed in the ruling,'ť Huawei said in a statement. 'œWe expect Canada's judicial system will ultimately prove Ms. Meng's innocence.'ť

A former Canadian ambassador to China, Guy Saint-Jacques, expects China to further punish Canada.

'œWe can expect two kinds of measures. First, unfortunately for Michael Kovrig and Michael Spavor, I expect that they will announce the cases will proceed to trial and it will become a lot more difficult to extract them from jail,'ť he said. 'œOn the commercial front they will want to cancel contracts, to cancel exports.'ť

But Saint-Jacques does not expect Beijing to cut off medical supplies to Canada as that would cause an international outcry.

'œThe image of China has taken a hit starting with the arrests of the two Canadians. This has been amplified by they way they have mishandled the COVID-19 pandemic. Europe in particular is more concerned about the Chinese,'ť he said.

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Gillies contributed to this report from Toronto.