Canada Lawyer: Huawei CFO Committed 'Commercial Dishonesty'
A senior executive for Chinese communications giant Huawei
Technologies committed fraud because of what she said during a meeting with a
bank official, and what she did not say, a Canadian government lawyer told an
extradition hearing Wednesday.
Canada arrested Meng Wanzhou, the daughter of Huawei’s
founder and the company’s chief financial officer, at Vancouver’s airport in
late 2018. The U.S. wants her extradited to face fraud charges. Her arrest
infuriated Beijing, which sees her case as a political move designed to prevent
China’s rise.
The U.S. accuses Huawei of using a Hong Kong shell company
called Skycom to sell equipment to Iran in violation of U.S. sanctions. It says
Meng, 49, committed fraud by misleading the HSBC bank about the company’s
business dealings in Iran.
The lengthy extradition proceeding is entering a phase which
involves arguments over the U.S. government’s request to extradite Meng.
Justice department lawyer Robert Frater said the case
against Meng is “about dishonest commercial dealings.”
Meng met with an HSBC executive after a series of news
stories connected Huawei with Skycom.
“Ms. Meng’s statements (during the meeting) were dishonest
because of what she did say and because of what she did not say,” Frater said.
Meng told the bank official that Huawei “was not engaged in
any activity that may cause HSBC to run afoul of US sanction law,” Frater said.
She also said Huawei was rigorous in its sanction compliance
and demanded the same of any partners working in Iran.
“The truth is, Huawei was in full control of Skycom,” Frater
said. “Skycom is Huawei.
“The dishonesty was partly through painting a picture of
distance through what Ms. Meng did say and neglecting to disclose the true
nature of the relationship by omission. What we have here are sins of both
commission and omission.’
Associate Chief justice Heather asked Frater why a large
bank like HSBC would rely on the word of one person.
Frater said Meng was important because she was Huawei’s CFO.
Holmes wondered if it was Meng’s responsibility to explain
risk to HSBC.
“She is the one that gives them the information which they can
assess the risk,” Frater said. “The message she is convening to them is you are
at not risk at all because we are complying with all sanctions."
Under further questioning from Holmes, Frater said some
business could legally be done with Iran and it was part of Meng’s job to know
what the restrictions were.
The judge also asked if Meng assured the bank there was no
risk of sanction violations, wouldn’t they assume Huawei had control of Skycom.
Frater said the message Meng sent was that Huawei “didn’t work
with bad people.”
Meng, who attended court wearing a facemask and an
electronic monitoring device on her ankle, followed the proceedings through a
translator.
Holmes isn’t expected to rule on Meng’s extradition until
later in the year. Whatever her decision, it will likely be appealed.
Meng’s lawyers have denied any dishonesty on her part. They
also argue HSBC was not placed at any risk and the charges against her are
politically motivated.
China’s government has criticized the arrest as part of U.S.
efforts to hamper its technology development. Huawei, a maker of network
equipment and smartphones, is China’s first global tech brand and is at the
center of U.S.-Chinese tension over technology and the security of information
systems.
On Tuesday a Chinese court sentenced Canadian entrepreneur
Michael Spavor to 11 years in prison for spying. Spavor and fellow Canadian
Michael Kovrig were arrested in December of 2018 in apparent retaliation for Meng’s
arrest.
Spavor was sentenced by a court in Dandong, about 210 miles
(340 kilometers) east of Beijing on the North Korean border. The government has
released few details other than to accuse Spavor of passing along sensitive
information to Kovrig, beginning in 2017. Both have been held in isolation and
have little contact with Canadian diplomats.
Earlier in the week, the Higher People’s Court of Liaoning
province in the northeast rejected an appeal by Canadian Robert Schellenberg,
whose 15-year prison term on drug smuggling charges was increased to death in
January 2019 following Meng’s arrest.
Meng remains free on bail in Vancouver and is living in a
mansion.
Canada and other countries, including Australia and the
Philippines, face trade boycotts and other Chinese pressure in disputes with
Beijing over human rights, the coronavirus and control of the South China Sea.
China has tried to pressure Canadian Prime Minister Justin
Trudeau’s government by imposing restrictions on imports of canola seed oil and
other products from Canada.
Meanwhile, Beijing is blocking imports of Australian wheat,
wine and other products after its government called for an investigation into
the origin of the coronavirus pandemic.
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