(Adds comments from Huawei and Chinese embassy)
By Tessa Vikander and Moira Warburton
VANCOUVER/TORONTO, May 27 (Reuters) - Huawei Technologies
Co's Chief Financial Officer Meng Wanzhou was dealt a setback by
a Canadian court on Wednesday as she tries to avoid extradition
to the United States to face bank fraud charges, dashing hopes
for an end to her 18-month house arrest in Vancouver.
The ruling, which could further deteriorate relations
between Ottawa and Beijing, elicited immediate strong reaction
from China's embassy in Canada, which said Canada is "accomplice
to United States efforts to bring down Huawei and Chinese
high-tech companies."
Meng, a Chinese citizen and daughter of Huawei's billionaire
founder Ren Zheng, was arrested in December 2018 on a warrant
issued by U.S. authorities. They accuse her of bank fraud for
misleading HSBC about Huawei's relationship with a
company operating in Iran, putting HSBC at risk of fines and
penalties for breaking U.S. sanctions on Tehran.
Meng's lawyers argued the case should be thrown out because
Canada did not have sanctions against Iran.
But British Columbia's Superior Court Associate Chief
Justice Heather Holmes disagreed, ruling the legal standard of
double criminality had been met.
"Ms. Meng's approach ... would seriously limit Canada's
ability to fulfill its international obligations in the
extradition context for fraud and other economic crimes," Holmes
said.
Huawei said it was disappointed by the Canadian court ruling
and it expects that Canada's judicial system will ultimately
prove her innocence.
The ruling paves the way for the extradition hearing to
proceed to the second phase starting June, examining whether
Canadian officials followed the law while arresting Meng.
Closing arguments are expected in the last week of September
and first week of October.
Reid Weingarten, a U.S. lawyer for Meng, said Meng should
"not be a pawn or a hostage" in the China-U.S. relationship.
Ties between the two superpowers are deteriorating steadily amid
disputes over trade and the future of Hong Kong.
"Today's ruling in Canada is only the opening salvo in a
very long process ... we are confident that ultimately justice
will be done," Weingarten said.
Shortly after the ruling was released Meng, 48, arrived at
the courthouse for an in-person briefing and left without
talking to the media. Meng says she is innocent..
Shortly after Meng's arrest, Beijing detained two Canadians
on national security charges and halted imports of canola seed.
ICE canola futures dipped on Wednesday, giving up gains
after the ruling.
The Global Times, published by the People's Daily, the
official newspaper of China's ruling Communist Party, said the
ruling "will make Canada a pathetic clown and a scapegoat in the
fight between China and the U.S."
The Chinese embassy in Ottawa said in a statement that China
expresses strong dissatisfaction and firm opposition to the
decision on Meng and has made serious representations with
Canada.
The U.S. Department of Justice thanked Canada for its
continued assistance. Canada's justice ministry said its lawyers
were committed to moving ahead as fast as possible.
(Reporting by Tessa Vikander and Moira Warburton;
Additional reporting by David Ljunggren and Steve Scherer in
Ottawa, Rod Nickel in Winnipeg and Karen Freifeld in New York;
Editing by Denny Thomas and Lisa Shumaker)
HSBC Holdings (HSBA)