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.