A legal battle spanning three countries that soured China’s relations with the U.S. could be ending as a top executive of Chinese high-tech giant Huawei reached an agreement with federal prosecutors.
The deal ends her nearly three-year extradition battle and may allow her to leave Canada and return home.
Huawei Chief Financial Officer Meng Wanzhou, one of the most high-profile female tech executives in China, has been fighting extradition after being detained in Canada on charges her company violated sanctions against trading with Iran. Chinese officials have angrily denounced the arrest, and two prominent Canadians were arrested in China on questionable espionage charges widely seen as a retaliation against Ottawa.
Justice Department prosecutors told a federal court in Brooklyn that a “deferred prosecution” agreement had been struck with Ms. Meng, calling for the U.S. government to dismiss the case next December, or four years after her arrest, if she complies with certain conditions, according to court records.
It is believed the deal would allow Ms. Meng, who had been detained since December 2018 at the request of the Trump administration, to return home.
A spokesperson for Huawei declined to comment, and a spokesman for the Justice Department in Washington did not respond to an email seeking comment.
The Canadian government has refused to give in to pressure from Beijing to release Ms. Meng, and a judicial hearing into the case for her extradition to the U.S. was concluded last month. A ruling by the court in Vancouver had been set for Oct. 21. It was not clear if a settlement of the case would also free the two detained Canadian citizens in China.
William Taylor III, Ms. Meng‘s attorney, told the Reuters news agency he was “very pleased” with the agreement, adding “we fully expect the indictment will be dismissed with prejudice after fourteen months. Now, she will be free to return home to be with her family.”
The Canadian Globe and Mail newspaper reported last week that the Biden Justice Department has been in talks with Huawei‘s legal team on a settlement that would allow Ms. Meng to go free. The newspaper said the U.S. is ready to drop the extradition fight if Huawei admits the violations and pays a penalty.
Huawei, one of the world’s biggest smartphone makers, was a particular target of the Trump administration, which argued its links to China’s Communist government and security agencies made it an unfit partner for nations looking to install next-generation 5G information networks.
While the case against Ms. Meng over the Iran sanctions may be headed for a settlement, Huawei itself is still subject to U.S. prosecution.
According to court filings, Ms. Meng agreed to defer prosecution for four years from the date of her arrest in December 2018 and notify Canada’s Ministry of Justice it is dropping its request for her extradition.
Justice also agreed that if Ms. Meng is in full compliance with the agreement all charges will be dropped in December 2022.
The criminal charges against her include conspiracy to commit bank fraud, conspiracy to commit wire fraud, bank fraud, and wire fraud.
She also will not be required to appear in U.S. court for the dismissal of the charges.
The statement of facts in the case lays out that Ms. Meng mislead an international financial institution about Huawei‘s use of a front company Skycom Tech Co. Ltd., a Hong Kong entity that was used to do business outside of international and U.S. sanctions on Iran.
The statement reveals details of an internal Huawei “suggested talking points” document about Huawei‘s covert work in Iran.
“With regards to cooperation: Skycom was established in 1998 and is one of the agents for Huawei products and services. Skycom is mainly an agent for Huawei,” the Huawei talking points stated.
During the period covered by the indictment, “Huawei caused Skycom to conduct approximately $100 million worth of U.S.-dollar transactions through Financial Institution 1 that cleared through the United States, at least some of which supported its work in Iran in violation of U.S. law, including $7.5 million for Iran-based contractors from the U.K. staffing company to do work in Iran,” the statement said.
The prosecution of the Huawei-Iran financial connection was triggered by a Reuters investigative report, the statement said.