New HSBC evidence would render U.S. reasons for Meng extradition 'unreliable'

The Meng Wanzhou extradition hearings resume recently last week to consider whether or not the court will include new documents obtained by the defence from Hong Kong courts.

The new documents, Meng’s defence team said, come from a separate matter between Meng – the CFO of Chinese tech giant Huawei Technologies Co. Ltd. – and British bank HSBC. The documents released by Hong Kong court, the defence noted, would clarify the banking relations between HSBC and Huawei.

If allowed to be introduced, Meng's lawyers said the evidence would "fatally" damages the U.S. allegation that Huawei and Meng committed fraud against HSBC.

"It is relatively rare that a person sought in a extradition proceeding is able to credibly challenge in a fraud prosecution whether the requesting state has even presented a plausible justification for committal," Meng lawyer Mark Sandler said in court this morning. "... The applicant is now on an equal footing with the requesting state and can say - having access to the first time HSBC's own records - that several elements of the offence of fraud... are implicated fatally by the new evidence."

The United States Department of Justice is alleging that Meng defrauded HSBC by misrepresenting Huawei’s links to Skycom, a subsidiary that had been selling Huawei technology in Iran. The U.S. is alleging that Meng in a 2013 meeting misrepresented Skycom’s relationship to Huawei, leading to HSBC continuing to facilitate the tech firm’s credit needs despite its violation of U.S. sanctions in Iran.

Such a move – combined with allegations that Huawei sold U.S.-derived technology in Iran and had the proceeds processed through HSBC’s U.S. financial networks – led to HSBC being exposed to risk of punishment from U.S. authorities, thus providing the backbone to the fraud charge against Meng.

Meng’s lawyers have argued that HSBC has always clearly known Skycom’s relationship with Huawei and was not an unknowing victim of fraud.

Defence attorneys for most of the day focused their efforts on how the new documents contradicted the record of the case (ROC) presented by U.S. authorities as the case for charging Meng with fraud.

In Tuesday's hearings, Sandler said the new HSBC evidence goes to the heart of that matter, noting that the documents showed senior HSBC risk assessment officials - not junior members of the bank, as the U.S. alleges - knew full well that Skycom was controlled by Huawei.

The new evidence would show this by noting senior HSBC members being included in the e-mail chain on the topic of Meng's presentation to Huawei in 2013 on the company's relationship with HSBC.

"The ROC [record of the case by the U.S.] is manifestly unreliable and must be corrected," Sandler said. "The court can determine the merits of the case based on the corrected ROC... Everything is in HSBC's own records."

That means, Meng's lawyers argue, that the U.S. charge of fraud must fail because it fails the causality test - that nothing Meng did in her 2013 presentation could have been the sole, direct and undisputable cause of HSBC keeping Huawei/Skycom as a client and violating U.S. sanctions on Iran.

"The requesting state cannot speak to the applicant [Meng] having fraudulently induced such an action," Sandler argued.

Defence lawyer Scott Fenton said they are not in court to argue whether the inaccuracies and omissions in the ROC were intentional or not, but the result was a misrepresentation to readers - i.e. Canadian authorities carrying out the extradition request - about what happened between HSBC and Meng/Huawei.

A number of the emails referred to in today's court hearing directed attention at an HSBC executive [name redacted] that had direct influence on the bank's risk assessment committee. That, Fenton said, means that the U.S. allegation that only junior members knew of Huawei's relationship with Skycom and Iran - one which also involves a sale in 2007 of Skycom from Huawei to Canicula Holdings, but with the caveat that all three companies' officials shared Huawei email addresses and banking accounts - was blatantly false.

"The main point is that - because of the omission by the description of the requesting state that managing director [name redacted] was fully informed as to the relationship between Huawei, Skycom and Canicula -  what is withheld from [the ROC]... is that [the HSBC executive] was instrumental in making risk assessments to that committee and other committees armed with all of the information she had," Fenton said.

That discrepancy with the ROC, Fenton argued, makes the U.S. document unreliable.

Previously, lawyers also argued against the U.S. having jurisdiction to punish Meng for events that happened on Chinese sovereign soil.

Separately, Huawei issued a statement on the case this afternoon, backing its CFO in calling the U.S. ROC "false and misleading," adding that the new evidence (if allowed to be introduced) will likely be relied upon by Meng's defence in August's committal hearings.

Earlier this month, Meng’s lawyers applied to create a publication ban on the court hearings today and tomorrow, citing Hong Kong courts’ request that any use of the documents respect the privacy rights of the individuals and companies identified in the new evidence.

The Crown, however, argued that similar documents have been assessed in public court previously in this case, and the procedure of redacting key names and identifiers have worked sufficiently in protecting people’s privacy rights.

Late last week, lawyers representing Canadian media companies and Huawei separately confirmed that associate chief justice Heather Holmes – the judge presiding over the case – rejected Meng’s application, allowing the media to cover today’s proceedings.

The main committal portion of the hearing will resume in August after a three-month delay from the original court schedule – again on a Meng application to consider this new evidence being brought forward.

Source: BIV.com

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