Lawyers for a Huawei executive wanted on fraud charges in the United States are accusing Crown attorneys of relying on American sanction law to make its case for extradition from Canada.

In documents released by the B.C. Supreme Court Friday, Meng Wanzhou's lawyers say Canada has rejected similar U.S. sanction against Iran and not only permits banks to do business with Iran-based entities but encourages them to do so. Her lawyers have said she should not be extradited because her actions wouldn't be considered a crime in Canada.

Both sides will make their arguments to the court next week during an extradition hearing to determine whether Meng's case is one of "double criminality," meaning her actions were criminal in both Canada and the country requesting her extradition. The United States alleges Meng lied about Huawei's relationship with its Iran-based affiliate Skycom to one of its bankers, HSBC, putting the financial institution at risk of violating American sanctions.

Meng, who's Huawei CFO, has denied the allegations and remains free on bail and living in one of her multimillion-dollar homes in Vancouver ahead of a court hearing set to begin Jan. 20. Lawyers for Canada's attorney general have argued Meng's alleged conduct put HSBC at risk of economic loss and that is sufficient to make a case for fraud in Canada.

They have also previously called the focus on sanctions a "complete red herring." "This case is about an alleged misrepresentation made by Ms. Meng to a bank that they relied upon, and in so relying, put their economic interests at risk," Crown prosecutor John Gibbs-Carsley said in May. In the new documents, Meng's team accuses the attorney general of advancing two contrary positions: that American sanctions do not need to be considered to determine whether she committed fraud, and that the sanctions are part of the foreign legal environment that gives context to the alleged misconduct.

"It is apparent that exposure to U.S. sanctions risk is a fundamental aspect of the allegation," the documents say. "In essence, this is a case of U.S. sanction enforcement masquerading as Canadian fraud."

The documents say that while Meng's alleged actions could put HSBC at risk of economic deprivation in the United States, the same economic deprivation could not happen to the bank in Canada.

"It is not a crime in Canada to do something in this country that, if done in the U.S. or elsewhere, would be a crime in the U.S." There is also no real risk that HSBC would be exposed to economic deprivation through criminal or civil penalties in Canada because the Canadian legal system does not penalize "an innocent victim of fraud," the documents say.

"If ... HSBC is an unwitting victim then it cannot be at risk of deprivation under any criminal law or quasi-criminal (regulatory) laws in Canada," the documents say. "We do not punish the morally innocent."

Meng made a brief appearance in court on Friday as lawyers discussed future court dates.