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Huawei crackdown

Huawei CFO Meng Wanzhou free to return to China

Beijing releases two detained Canadians after executive reaches deal with U.S.

Huawei Technologies CFO Meng Wanzhou leaves her home to attend a virtual court hearing in Vancouver, Canada, on Sept. 24.   © Reuters

NEW YORK -- Huawei Chief Financial Officer Meng Wanzhou has reached an agreement with U.S. prosecutors to resolve fraud charges against her on Friday. With a Canadian judge signing her discharge, she is free to leave Canada after nearly three years.

Meng appeared virtually in a hearing at Brooklyn federal court. She pleaded not guilty to fraud charges and agreed to the terms of a deferred prosecution, which is a speedy trial that will be delayed to Dec. 1, 2022. It means the U.S Department of Justice will hold off prosecution till next year and if Meng complies with conditions laid out by court, the charges will be dropped.

"In entering into the deferred prosecution agreement, Meng has taken responsibility for her principal role in perpetrating a scheme to defraud a global financial institution," said Acting U.S. Attorney Nicole Boeckmann for the Eastern District of New York, in a statement released by the Department of Justice.

"Meng's admissions confirm the crux of the government's allegations in the prosecution of this financial fraud -- that Meng and her fellow Huawei employees engaged in a concerted effort to deceive global financial institutions, the U.S. government and the public about Huawei's activities in Iran."

One of Meng's lawyers, William Taylor, said he is "very pleased" that this deal was reached.

"Under the terms of this agreement, Ms. Meng will not be prosecuted further in the United States and the extradition proceedings in Canada will be terminated," he said in a statement. "She has not pleaded guilty and 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."

Later Friday, Meng appeared in a hearing at the British Columbia Supreme Court in Vancouver, where the Canadian judge signed her discharge and Meng's lawyers asked for the return of her electronic devices that had been confiscated. All parties thanked each other for being courteous during this lengthy process. Meng is officially free to return home. 

This will resolve a major dispute between the U.S. and China against the backdrop of worsening relations. Meng is the oldest daughter of Huawei founder Ren Zhengfei. Her extradition trial started in the midst of the trade war between the two largest economies in the world, when Donald Trump was president.

Meng was arrested at Vancouver International Airport in 2018 upon a U.S. indictment request that she committed bank and wire fraud for allegedly misleading HSBC on Huawei's relationship with Iranian subsidiary Skycom. Meng has been under house arrest at one of her million-dollar mansions in Vancouver and she has been wearing a GPS tracking ankle bracelet.

Meng has said she is innocent and has been fighting extradition to the U.S. at the British Columbia Supreme Court. Her hearings wrapped up in August and a ruling is expected on Oct. 21.

Whether Meng would walk after the Brooklyn court hearing was seen potentially impacting the release of two Canadians in China. Michael Spavor and Michael Kovrig were arrested in China over allegations of espionage shortly after Meng was detained. Spavor was sentenced to 11 years in prison in August.

There have been protests in front of the Vancouver court during Meng's hearings for the release of the two Canadians. Tensions had been increasing among the U.S., China and Canada over Meng's case.

U.S. President Joe Biden has also nominated Thea Kendler, an attorney on the criminal case against Meng and Huawei, for a Commerce Department position vital to controlling exports to China. Washington has put Huawei and dozens of Chinese companies on a blacklist, restricting sales of American technology products to these companies.

On Friday night, Meng boarded an Air China flight bound for Shenzhen, a southern city in China and Huawei's headquarters, according to the AFP news agency. Chinese netizens are applauding Meng's return on Chinese social media platform Weibo.

To Canadians, the release of Meng is seen as a sign of relief as China freed the detained Canadians hours after Meng's hearing. The two Michaels are on their way home, Canadian Prime Minister Justin Trudeau told reporters.

"This is a happy day in Vancouver with Meng returning to China tonight. It is a necessary step to the resolution of our 3M's (Meng and two Michaels) problem that has festered for almost three years," said Paul Evans, professor of public policy and global affairs at the University of British Columbia. "The standoff has unleashed an avalanche of anger, negativity and mistrust on both sides."

Evans said the public mood in Canada and in China have soured toward each other, and the relations will not improve quickly.

"It remains to be seen how far Canada will line up with the U.S. and Australia in their strategic competition with China," Evans added. "When we have resolved fully the 3M's problem we will be in a better position to make a coolly reasoned set of decisions about our approach to living with a rising China."

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