A Canadian judge has dealt a major blow to a senior Huawei executive’s attempts to evade extradition to the United States, ruling that the high-profile case against Meng Wanzhou can proceed. The British Columbia supreme court justice Heather Holmes ruled on Wednesday that the alleged actions of Meng would be considered a crime in Canada – a key condition for extradition to proceed. The decision, is likely to be applauded by American officials, but will further strain relations between Canada and China, which have deteriorated significantly since Meng’s arrest in December 2018. Meng was detained on a US warrant during a flight stopover at Vancouver airport, and the ensuing spat between the United States and China has left Canada taking collateral damage in the form of punitive trade measures and the retaliatory detention of Canadian citizens in China. US prosecutors argue that Meng committed fraud when she lied about links between Huawei and a shell company used to sell telecommunications equipment to Iran in breach of US sanctions. At issue in Wednesday’s ruling was the question of “double criminality” – whether Meng’s alleged actions in the United States would be considered a crime in Canada. Canadian government lawyers argued that Meng lied about her company’s dealings with Iran when speaking to prospective investors at large banks, potentially putting them at risk of breaching the US sanctions. This deception, they said, amounted to fraud. In her ruling, Justice Holmes concurred, finding that the “essence of the alleged wrongful conduct” lay in the deliberate attempts to misled bankers. She also determined that while the alleged attempt to evade American sanctions on Iran could have harmed the bank, the act was not a central component of the offense. Meng’s legal team had argued that her behaviour did not amount to fraud, and that Canada did not have the same sanctions against Iran. Her lawyers are expected to appeal against the ruling, but the case will now probably enter its next stage, in which the defence will argue that US and Canadian authorities conspired against Meng. The Huawei executive’s lawyers argue that her rights were breached by Canadian border guards who detained her for hours before her arrest by the Royal Canadian Mounted Police. By opening multiple legal fronts, Meng’s team has all but ensured the tussle will last for years, with many experts believing the case is inevitably bound for the supreme court of Canada. Following the ruling, Meng will have to continue living under house arrest in Vancouver, where she owns two homes. While under a curfew and required to wear a GPS tracking device, she is nonetheless able to travel freely around the city. Over the weekend, she was photographed by a CBC News reporter, standing outside the provincial courthouse, smiling and posing for pictures with friends and family. Ahead of the verdict, China’s foreign minister, Zhao Lijan, called the case against Meng a “serious political incident” that had violated her rights. “The Canadian side should correct its mistake, immediately release Ms Meng and ensure her safe return to China so as to avoid any continuous harm to China-Canada relations,” he said during a press conference on Tuesday. In a statement posted on Twitter, Huawei said it was “disappointed” in the ruling, adding that it stood with Meng in “her pursuit for justice and freedom”. “We expect that Canada’s judicial system will ultimately prove Ms Meng’s innocence. Ms Meng’s lawyers will continue to work tirelessly to see justice is served,” the statement said. Justin Trudeau has warned against Chinese allegations that the case is politically motivated. “Canada has an independent judicial system that functions without interference or override by politicians,” the prime minister said last week. “China doesn’t work quite the same way and doesn’t seem to understand that.” Meng’s verdict comes amid growing frustration in Canada over the continued detention of Michael Kovrig and Michael Spavor, two Canadians who were seized in China shortly after Meng’s arrest.