Huawei CFO's legal team presents final arguments

As Meng Wanzhou's extradition hearing resumed this week in Canada, her legal team made a last pitch to the judge to stay the proceeding, arguing that there is no evidence showing that the Huawei executive caused HSBC to violate US sanctions against Iran.

Defense lawyer Mark Sandler opened the arguments by elaborating on elements of deprivation, HSBC's risk of violating the US sanctions, and the causal connection between Meng's actions and the bank's alleged losses. All those facts substantiate that fraud cannot be established, he said.

"In Canada's legal history, there was never a fraud case in which the government would hold the victim accountable in the absence of actual losses," Sandler told Associate Chief Justice Heather Holmes in the British Columbia Supreme Court in Vancouver on Monday.

In thousands of fraud cases, victims all relied upon deceptive statements of perpetrators and made choices that had caused damage to themselves or put them at risk of damage, Sandler said. However, the defense argued that there was no damage or any risk of it in Meng's case.

"There's no evidence that HSBC suffered any actual loss. There's no evidence that HSBC was charged criminally. There's no evidence HSBC was sued or otherwise proceeded against civilly," Sandler told the court.

US records of the case allege that Meng, the 49-year-old chief financial officer of the Shenzhen telecom giant, misrepresented Huawei's relationship with Skycom when she was giving a presentation to HSBC in 2013, putting the bank at risk of violating US sanctions against Iran. Meng and Huawei Technologies deny the accusations.

'Crystal clear'

The defense noted that Meng had clearly stated that both Huawei and Skycom operated in Iran in her 2013 presentation and presentation deck. Even though HSBC knew that the payments made by Skycom to its partner Networkers were related to Iran, the bank still chose to clear the transactions via the US.

"That's been made crystal clear," said Sandler to the judge. "HSBC chose to clear the Networkers payments through the US despite being told the precise relationship－affiliates, partners, controllable third parties－was irrelevant to whether HSBC could clear in the US," he said.

"Liability for violating sanctions was HSBC's own doing and had nothing to do with Meng. I can state this another way: Nothing Meng said induced HSBC to violate US sanctions law."

The records of the case described HSBC as an unknowing victim that could be criminally liable as a result of its violations due to Meng's fraudulent presentation. The defense argued that the Canadian attorney general's theory regarding the deprivation risk faced by HSBC under the US sanctions was "untenable", regardless of whether it was considered from a factual or legal perspective.

"Even if you found that there's evidence to support the inference that Meng's representations supported HSBC's dollar-clearing decision, there's no evidence that HSBC suffered any actual loss," Sandler said.

Robert Frater, a lawyer for the Canadian attorney general, concluded last week that in the government's request for Meng's extradition, the US does not need to prove that HSBC relied on what Meng said to make its case for fraud.

Sandler said he is "shocked" that an extradition case that has spanned almost three years has yet to generate a clear cause of causality to establish Meng's culpability of fraud.

"It is an unsound argument," Sandler said. "Reliance, in this case, is fundamental to causation. ... And there's no evidence that Ms Meng knew how these transactions would be processed."