Huawei CFO leaves Canada for China after agreement with US over fraud charges, detained Canadians head home

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Deal opens President Biden to more criticism that his administration is surrendering to China

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Huawei Chief Financial Officer Meng Wanzhou flew to China on Friday after reaching an agreement with US prosecutors to end a bank fraud case against him, easing tensions between China and the United States.

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Within hours of news of the deal, two Canadians who were arrested shortly after Meng was taken into custody in December 2018 were released from Chinese prisons and were on their way back to Canada. Beijing denied that their arrests were linked.

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The years-long extradition drama has been a central source of discord in rapidly deteriorating relations between Beijing and Washington, with Chinese officials indicating that the case should be taken up to help end a diplomatic standoff between the world’s top two powers. need to leave.

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The deal also opens US President Joe Biden to criticism of China’s hawkers in Washington, who argue that his administration puts China and one of its top companies at the center of the global technology rivalry between the two countries.

Meng was arrested at Vancouver International Airport on a US warrant, and indicted on bank and wire fraud charges in 2013 for allegedly misleading HSBC about the telecommunications equipment giant’s business deals in Iran.

Exclusively on Friday, Reuters reported that the United States had reached a deferred prosecution agreement with Meng. Acting U.S. Attorney Nicole Boeckman in Brooklyn said that entering into the settlement, “Meng has assumed responsibility for his leading role in executing a plan to defraud a global financial institution.”

The settlement pertains only to Meng, and the US Justice Department said it is preparing a trial against Huawei and is looking forward to proving its case in court.

A Huawei spokesperson declined to comment.

A person familiar with the matter said Meng – the daughter of Huawei founder, Ren Zhengfei – had left Canada on a flight to Shenzhen.

Two Canadians, businessman Michael Spavor and former diplomat Michael Kovrig, were held in China for more than 1,000 days. In August, a Chinese court sentenced Spavor to 11 years in prison for espionage.

Prime Minister Justin Trudeau told reporters in brief remarks late Friday that the two men had left Chinese airspace minutes earlier. He was not asked whether the two countries have entered into a bilateral agreement.

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“I want to thank our colleagues and partners around the world in the international community who have stood in solidarity with Canada and these two Canadians,” he said.

In a hearing in Brooklyn federal court on Friday, in which Meng attended virtually from Canada, Assistant U.S. Attorney David Kessler said the government would move to dismiss the charges against her if she complied with all of her obligations under the agreement. , which ends in December 2022. He said Meng would be released on a personal identification bond, and the United States plans to withdraw its request for his extradition from Canada.

Meng pleaded not guilty to the charges at the hearing. When US District Court Judge Ann Donnelly later accepted the deferred prosecution agreement, Meng sighed audibly.

A Canadian judge later signed Meng’s release order, vacating his bail conditions and allowing him to be freed after nearly three years of detention.

After the judge’s order, she got emotional, hugging and thanking her lawyers.

Later speaking to supporters and reporters on the court’s moves, Meng thanked the judge for his “fairness” and talked about how the case “turned his life upside down”.

Meng was confined to her expensive Vancouver home at night and was monitored 24/7 by private security that she paid for as part of her bail agreement. Referred to as “Huawei’s Princess” by Chinese state media, she was required to wear an electronic ankle bracelet to monitor her movements, which became fodder for tabloids when hung over her designer shoes.

‘Huawei Secret’

In 2012 and 2013, articles published by Reuters about Huawei, Hong Kong-registered company Skycom and Meng featured prominently in the US criminal case against him. Reuters reported that Skycom had in 2010 offered to sell Hewlett-Packard computer equipment worth at least 1.3 million euros to Iran’s largest mobile-phone operator.

Reuters also reported several financial and personnel relationships between Huawei and Skycom, with Meng serving on Skycom’s board of directors between February 2008 and April 2009. The stories prompted HSBC to question Meng about Reuters’ findings.

Huawei was placed on a US trade blacklist in 2019 that restricts sales to the company for activities contrary to US national security and foreign policy interests. The sanctions have hit the company, which suffered its biggest revenue decline in the first half of 2021, as US supply restrictions forced it to sell a portion of its once-major handset business before new growth areas mature. removed it.

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The blacklisting cited criminal cases against Meng and Huawei. Huawei is accused of operating as a criminal enterprise, stealing trade secrets and defrauding financial institutions. It has pleaded not guilty.

A Canadian government official said Ottawa would not comment until the end of US court proceedings.

Huawei has become a dirty word in Washington, with China quick to react to any news in Congress that could be perceived as the United States softening despite Huawei’s struggle under trade sanctions .

Then-President Donald Trump politicized the matter when he told Reuters shortly after Meng’s arrest that he would intervene if it served national security or helped secure a trade deal. Meng’s lawyers have said she was a pawn in the political battle between the two superpowers.

Republican China hardliners in Congress called Friday’s deal a “capitulation.”

“Instead of standing firmly against China’s hostage-taking and blackmail, President Biden turned,” Republican Senator Tom Cotton said in a statement.

Senior US officials have said Meng’s case was only being handled by the Justice Department and that the case had no bearing on the US approach to strained relations with China.

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During US Vice Secretary of State Wendy Sherman’s visit to China, Chinese Vice Foreign Minister Xie Feng insisted that the United States drop its extradition case against Meng.

US officials have acknowledged that Beijing linked Meng’s case to the case of two detained Canadians, but insisted Washington would be unwilling to see them as bargaining chips.


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