Canadian prosecutors are expected to defend on Wednesday their case to extradite Huawei Chief Financial Officer Meng Wanzhou to the United States saying Meng was arrested on charges of bank fraud, which is a crime in both countries, and not because of US sanctions against Iran as argued by the defence.
Meng's legal team continued its defence during the first phase of the extradition hearing on Tuesday, with lawyers arguing for a second straight day that "double criminality" is at the heart of the US extradition request.
When ending its arguments on Tuesday, the defence told the judge that the case is "unique" because "the risk of economic deprivation arises solely from the operation of a foreign criminal law for which no corresponding Canadian…law exists."
As Meng's formal extradition hearing started this week, China repeated its call for Canada to release her.
The United States has charged Meng with bank fraud, and accused her of misleading HSBC Holdings Plc (HSBA.L) about Huawei Technologies Co Ltd's business in Iran.
"The essence of the Applicant's conduct is fraud on a bank: the Applicant is alleged to have made several misrepresentations to a bank to secure financial services," submissions made by the Canadian government earlier this month showed.
Court proceedings show the United States issued the arrest warrant, which Canada acted on in December 2018, because it believes Meng covered up attempts by Huawei-linked companies to sell equipment to Iran, breaking US sanctions against the country.
Meng, the daughter of Huawei's billionaire founder Ren Zhengfei, remains free on bail in Canada, and has been living in a mansion in Vancouver's exclusive Shaughnessy neighbourhood.
She has said she is innocent and is fighting extradition in part because her alleged conduct was not illegal in Canada, an argument known legally as "double criminality."
Unlike the United States, Canada did not have sanctions against Iran at the time Canadian officials authorized commencing with the extradition, her lawyers have said.
"The fact that Canada may have a different sanctions against Iran than the US should not distract the court from the necessary inquiry into the essence of the conduct for double criminality purposes. Deceit and risk of loss are at the heart of the conduct," the submissions added.
On Monday, defence lawyer Richard Peck told the court that in a typical case, double criminality is not contentious. "This case however is founded on an allegation of breach of US sanctions, sanctions which Canada has expressly repudiated," he said. "Sanctions drive this case," Peck said.
A spokesman for Canadian department of justice said, "Our position will be further explained in court this week, where an independent judge will hear arguments."
Meng's legal team is currently only scheduled to call evidence in the last week of April, and a second phase of the trial, focusing on abuse of process and whether Canadian officials followed the law while arresting Meng, is set to begin in June. Closing arguments are expected in the last week of September and first week of October.
The case has had a chilling effect on relations between Ottawa and Beijing. China has called Meng's arrest politically motivated.
Legal experts have said it could be years before a final decision is reached in the case, since Canada's justice system allows many decisions to be appealed.