UPDATE 1-Canada border official says information shared inappropriately with FBI in Huawei CFO case

(Adds details from court proceedings)

VANCOUVER, Dec 11 (Reuters) - A Canadian border official who oversaw staff at Vancouver’s airport when Huawei Chief Financial Officer Meng Wanzhou was arrested two years ago testified on Friday she thought information sharing between her agency and the federal police was inappropriate.

Canada Border Services Agency (CBSA) Chief Nicole Goodman told the court Meng’s travel history should not have been shared with the FBI. She was reacting to communications shown in court between Canadian and U.S. agencies that did not establish a clear legal basis for such sharing.

Goodman testified in British Columbia Supreme Court as part of Meng’s U.S. extradition case. Meng, the 48-year old daughter of Huawei founder Ren Zhengfei, was arrested on a U.S. warrant on Dec. 1, 2018 at Vancouver International Airport.

She faces charges of bank fraud for allegedly misleading HSBC about Huawei Technologies Co Ltd’s business dealings in Iran, causing the bank to break U.S. sanctions.

Meng has denied the charges and is fighting the extradition from Vancouver, where she is under house arrest.

Her lawyers have argued that U.S. and Canadian authorities coordinated ahead of her arrest, using the extended investigative powers of the CBSA to first interrogate her without a lawyer present. They allege that the Royal Canadian Mounted Police (RCMP) directed the CBSA’s investigation of Meng, and that the agency inappropriately shared information with the RCMP. On Friday Meng’s defense lawyer Mona Duckett in her questioning of Goodman sought to reinforce a claim that Canadian officials mishandled Meng’s case, such as by the RCMP illegally leading the CBSA’s investigation and covering this up.

“There’s nothing for me to hide. I feel like everything was done in good faith,” Goodman said.

Prosecutors say the investigation and arrest followed standard procedures and the extradition should move forward.

The Canadian prosecutors on the case also said that two additional witnesses are expected to testify next week as part of Meng’s ongoing U.S. extradition hearing. Witness testimony continues amid reports last week that U.S. prosecutors are discussing a deal with lawyers for Meng to resolve criminal charges against her, signaling a potential end to a case that has strained ties between the United States, China and Canada.

China arrested Canadian citizens Michael Spavor and Michael Kovrig on espionage charges soon after Meng’s arrest.

Meng’s extradition hearing is expected to wrap up in April. (Reporting by Sarah Berman in Vancouver and Moira Warburton in Toronto; Editing by Denny Thomas and Cynthia Osterman)