A Canadian court has ruled that the case of senior Huawei executive Meng Wanzhou, who is fighting extradition to the United States, can go forward.
A judge found that the case meets the threshold of double criminality – meaning the charges would be crimes in both the US and Canada.
The US wants Ms Meng to stand trial on charges linked to the alleged violation of US sanctions against Iran.
Her case has created a rift between China and Canada.
Her lead defence lawyer, Richard Peck, has argued in court that Canada is effectively being asked “to enforce US sanctions”.
But Associate Chief Justice Heather Holmes ruled Wednesday in British Columbia’s Supreme Court in Vancouver that the crimes she is charged with in the US would also have been crimes in Canada in 2018.
The approach taken by Ms Meng’s lawyers, if upheld, “would seriously limit Canada’s ability to fulfil its international obligations in the extradition context for fraud and other economic crimes,” she added.
The US has charged Ms Meng with fraud over a Huawei-owned company’s alleged dealings with Iran.
Relations between the US and China have already been strained by disputes over trade and the future of Hong Kong.
Washington has been lobbying its allies – including the UK – to not use Huawei’s 5G technology services in critical communications infrastructure, alleging it could be a security threat.
Following Wednesday’s ruling, Reid Weingarten, a US lawyer for Ms Meng, said his client should “not be a pawn or a hostage” in the China-US relationship.
“Today’s ruling in Canada is only the opening salvo in a very long process … we are confident that ultimately justice will be done,” he added.
Meanwhile, a spokesman for Huawei, Benjamin Howes, said the company was “disappointed” in the ruling.
“We have repeatedly expressed confidence in Ms Meng’s innocence. Huawei continues to stand with Ms Meng in her pursuit for justice and freedom.”
China has repeatedly called for Ms Meng to be released, and on Tuesday Beijing warned the case would cause “continuous harm to China-Canada relations”.
Following the ruling, a Chinese embassy spokesperson in Canada told CBC news: “The purpose of the United States is to bring down Huawei and other Chinese high-tech companies, and Canada has been acting in the process as an accomplice of the United States. The whole case is entirely a grave political incident.”
China is believed to have arrested two Canadians – Michael Kovrig, a former diplomat, and Michael Spavor, a businessman – in retaliation for Ms Meng’s arrest. Canada’s Prime Minister Justin Trudeau calls their continued detention “arbitrary”.
“Canada has an independent judicial system that functions without interference or override by politicians,” Mr Trudeau said last week.
“China doesn’t work quite the same way and doesn’t seem to understand that.”
On Wednesday, Mr Kovrig’s former employer called on China to release him.
“Ruling was not about our colleague Michael Kovrig & ought have no bearing on his case,” tweeted Robert Malley, president and CEO of International Crisis Group.
“He shouldn’t be held as a pawn.”
What is the background?
Ms Meng is the chief financial officer of Huawei and the daughter of its founder Ren Zhengfei.
She has been out on bail but under house arrest in Vancouver, where she owns property, since shortly after she was detained in December 2018.
Not long after her arrest, China detained two Canadian nationals – Mr Kovrig and Mr Spavor – and has accused the pair of espionage.
The move by Beijing is widely viewed as “hostage diplomacy” – a tactic to put pressure on Canada to release the Huawei executive.
“The Government of Canada’s top priority is and remains securing the release of Michael Kovrig and Michael Spavor, who have been arbitrarily detained for over 500 days. We will continue to advocate for their immediate release,” said Foreign Affairs Minister François-Philippe Champagne after Wednesday’s ruling.
Ms Meng’s arrest also led to a trade row between Canada and China.
What is next in the case?
A second hearing, focusing on allegations of abuse of process and whether Canadian officials followed the law while arresting Ms Meng, is currently scheduled for next month.
Even if a Canadian court eventually recommends extradition, it is the federal justice minister who makes the ultimate decision.
It is highly likely the overall process could be lengthy. Ms Meng has avenues to appeal throughout the process and some extradition cases have dragged on for years.
‘Case gives US leverage in 5G row’
Analysis by Zoe Thomas, Technology Reporter, BBC News
This case was just the first step in Ms Meng’s fight against US extradition. Still, it is a blow to Huawei and the Chinese government. A ruling in Ms Meng’s favour would have helped China portray the US as a bully, and given Huawei a leg up as it pushes for a larger role in global 5G networks.
The US has not shied away from throwing its weight around to prevent the Chinese telecoms giant from being involved in other countries’ creations of the high-speed internet networks.
Even though this case isn’t directly about 5G, it does give the US leverage to paint Huawei’s chief financial officer as a bad actor.
It’s not all bad news for Ms Meng or Huawei. Her case now moves to another round of hearings – this time about whether the Canadian police who arrested her violated her rights.
If she is successful in that case she could be sent home, perhaps a little later than hoped but with just as much freedom.