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Huawei CFO to seek extradition stay citing Trump comments

Huawei CFO to seek extradition stay citing Trump comments
Huawei's Financial Chief Meng Wanzhou leaves her family home in Vancouver, British Columbia, Canada, May 8, 2019. REUTERS/Lindsey Wasson -
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LINDSEY WASSON(Reuters)
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By Evan Duggan and Karen Freifeld

VANCOUVER/NEW YORK (Reuters) - Huawei's chief financial officer intends to seek a stay on extradition proceedings in part based on statements by President Donald Trump about the case, which her lawyers say disqualifies the United States from pursuing the matter in Canada.

Meng Wanzhou, 47, the daughter of Huawei Technologies Co Ltd's billionaire founder Ren Zhengfei, was arrested at Vancouver's airport in December on a U.S. warrant and is fighting extradition on fraud charges that she misled global banks about Huawei's relationship with a company operating in Iran.

Meng’s defence lawyers said in a document that she has been unlawfully detained in Canada and that there is no evidence she misrepresented to a bank Huawei's relationship with a company operating in Iran called Skycom, thereby putting the bank at risk of violating U.S. sanctions law, or that the bank relied on her statements.

The bank has been identified as HSBC. HSBC did not immediately respond to a request for comment.

Huawei has previously said Skycom was a local business partner in Iran, while the United States maintains it was an unofficial subsidiary used to conceal Huawei’s Iran business.

Meng defence lawyer Scott Fenton told the court that during her three-hour detention in December, Meng's rights "were placed in total suspension."

The lawyers also claim Meng cannot be extradited because Canada should not extradite a person to face punishment for conduct that is not criminal in Canada.

The bank and wire fraud charges do not meet that criteria because Meng is accused of encouraging HSBC to engage in transactions that violate U.S. sanctions laws. But there would be no risk of fines or forfeiture for any bank in Canada.

"Put another way, the alleged offence could only exist in a country that prohibits international financial transactions in relation to Iran," the lawyers said in court documents. "Canada is no longer such a country."

Meng will next appear in court on Sept. 23, when her defence will make more applications for more disclosure. No date has been yet set for an extradition hearing, a process that could take years.

Her case has attracted global attention and sparked a diplomatic crisis between Beijing and Ottawa. China has repeatedly demanded Meng's release.

Huawei said in a statement on Wednesday that the criminal case against Meng is based on allegations that are simply not true, adding that the U.S.-ordered arrest was "guided by political considerations and tactics, not by the rule of law."

Huawei and Skycom are also defendants in the U.S. case, accused of bank and wire fraud, as well as violating U.S. sanctions on Iran.

Meng lawyers said comments by Trump, who told Reuters the charges against Meng could be dropped if that would help China trade talks, disqualify the United States from pursuing the case further in Canadian courts.

Justice Holmes granted Meng's request to move to a larger second mansion she owns in Vancouver, for security reasons.

The relocation is sure to deepen the anger of some Canadians at the difference between her lifestyle and how two Canadians are being held in a Chinese detention centre, said Paul Evans, a professor at the University of British Columbia's School of Public Policy and Global Affairs.

In recent weeks, China has upped the pressure on Canada and halted Canadian canola imports and suspended the permits of two major pork producers.

Meanwhile, a second Huawei Canada executive has left the company, Reuters reported on Tuesday.

Meng was released from jail in December on C$10 million (£5.71 million) bail and must wear a GPS tracker, an ankle bracelet and pay for security guards. She has been living in a Vancouver home valued at C$5.6 million in 2017.

She arrived at court, wearing an elegant full-length black and gray weave-pattern dress, with the ankle monitor prominently visible.

(Reporting by Evan Duggan in Vancouver and Karen Freifeld in New York; Additional reporting by David Ljunggren in Ottawa; writing by Denny Thomas; editing by Bill Rigby, Jonathan Oatis and Lisa Shumaker)

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