VANCOUVER — Lawyers for Meng Wanzhou are set to reply today to Crown arguments as the first phase of an extradition hearing for the Huawei executive draws to a close.

The British Columbia Supreme Court hearing this week has focused on the legal test of double criminality, or whether the conduct Meng is accused of would also be a crime in Canada.

The United States has charged Meng with fraud over allegations she lied to HSBC about Huawei's relationship with an Iran-based subsidiary, putting the bank at risk of violating American sanctions.

Her arrest in December 2018 at Vancouver's airport set off a diplomatic uproar with Beijing detaining two Canadians and restricting some imports in moves widely viewed as retaliation.

The defence has argued the allegations aren't criminal in Canada because the country has no sanctions against Iran, but the Crown says Meng's alleged lies put the bank at financial risk regardless.

If Justice Heather Holmes rules there is double criminality, then the hearing will proceed to a second phase in June, but if she finds the legal test hasn't been met, Meng will be free to leave Canada.

Meng denies the allegations and is free on bail, living in one of her two multimillion-dollar homes in Vancouver.

Her lawyers argued earlier this week that fraud must involve harm or risk of harm, but HSBC wouldn't have faced any consequences in Canada for doing business in Iran because of the lack of sanctions.

The Crown responded that the judge does not necessarily need to consider American sanctions law for the allegations to amount to fraud in Canada.

HSBC faced significant reputational risk for processing Iran-related transactions because it had already been penalized for doing business in countries including Libya and Sudan, the Crown said.

The Crown also argued that the judge can, according to case law, consider the context of American sanctions in a limited way to understand the risk faced by HSBC.

This report by The Canadian Press was first published Jan. 23, 2020.

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