U.S. using fraud allegations to dress up sanctions complaint: Meng’s defence

The defence says the case is really about the United States seeking to enforce its Iranian sanctions laws against Meng for conduct that took place outside both the United States and Canada.

“In reality, this case is about the United States seeking to enforce its Iranian sanctions laws against the applicant, who is neither a U.S. citizen nor a Canadian citizen, for conduct that took place outside of both countries,” the defence documents say.

“The requesting state seeks to dress up its sanctions breaking complaint as a case of fraud.”

The attorney general of Canada, which acts on behalf of the United States in the case, has not yet filed its written arguments but has previously called the focus on sanctions a “complete red herring.”

“This case is about an alleged misrepresentation made by Ms. Meng to a bank that they relied upon, and in so relying, put their economic interests at risk,” Crown prosecutor John Gibbs-Carsley said in May.

The U.S. Department of Justice has laid 13 criminal charges, including conspiracy, fraud and obstruction, against Huawei and Meng, who is the daughter of company founder Ren Zhengfei. The indictment accuses Huawei and Meng of misrepresenting their ownership of Skycom, a Hong Kong-based subsidiary, between 2007 and 2017 in an effort to circumvent U.S. sanctions against Iran.

Meng is alleged to have said Huawei and Skycom were separate companies in a PowerPoint presentation during a meeting with an executive of a financial institution, misleading the executive and putting the institution at risk of financial harm and criminal liability.

Huawei has said the PowerPoint was not misleading, the bank had knowledge of the nature of Skycom’s business in Iran and the bank understood the relationship between Huawei and Skycom.

The defence team’s 40-page memorandum of fact and law released Thursday outlines arguments it will make on the principle of “double criminality” at a hearing in January.

Double criminality ensures Canada does not extradite a person to face punishment in another country for conduct that Canada does not deem criminal.

The alleged misrepresentation to the bank does not amount to fraud in Canada, which requires a prohibited act and a “risk of deprivation” caused by that act. And even if the misrepresentation is a prohibited act, “under Canadian law it caused no risk of deprivation in Canada,” the defence argues.

“The USA had unique sanctions laws against Iran that proscribed HSBC’s transactions, but Canada did not,” it says.

Had the alleged events and transactions taken place in Canada, HSBC would not face any potential liability under Canadian sanctions laws and, therefore, HSBC’s financial interests could not have been at risk, it says.

“In other words, the essential element of deprivation would not be met.”

This report by The Canadian Press was first published Nov. 28, 2019.

Amy Smart, The Canadian Press

by Canadian Press

U.S. using fraud allegations to dress up sanctions complaint: Meng’s defence

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