Huawei CFO leaves Canada for China after agreement with US over fraud charges
Huawei Chief Financial Officer Meng Wanzhou flew home to
China on Friday after reaching an agreement with U.S. prosecutors to end the
bank fraud case against her, relieving a point of tension between China and the
United States.
Within hours of the news of the deal, two Canadians who were
arrested shortly after Meng was taken into custody in December 2018 were
released from Chinese jails and were on their way back to Canada. Beijing had
denied that their arrests were linked.
The years-long extradition drama has been a central source
of discord in increasingly rocky ties between Beijing and Washington, with
Chinese officials signaling that the case needed to be dropped to help end a
diplomatic stalemate between the world's top two powers.
The deal also opens U.S. President Joe Biden up to criticism
from China hawks in Washington who argue his administration is capitulating to
China and one of its top companies at the center of a global technology rivalry
between the two countries.
Meng was arrested at Vancouver International Airport on a
U.S. warrant, and indicted on bank and wire fraud charges for allegedly
misleading HSBC in 2013 about the telecommunications equipment giant's business
dealings in Iran.
In an exclusive on Friday, Reuters reported that the United
States had reached a deferred prosecution agreement with Meng. Nicole
Boeckmann, the acting U.S. Attorney in Brooklyn, said that in entering into the
agreement, "Meng has taken responsibility for her principal role in
perpetrating a scheme to defraud a global financial institution."
The agreement pertains only to Meng, and the U.S. Justice
Department said it is preparing for trial against Huawei and looks forward to
proving its case in court.
A spokeswoman for Huawei 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.
The two Canadians, businessman Michael Spavor and former
diplomat Michael Kovrig, had been 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 on Friday the two men had left Chinese airspace just minutes
before. He was not asked whether the two countries had struck a bilateral deal.
"I want to thank our allies and partners around the
world in the international community who have stood steadfast in solidarity
with Canada and with these two Canadians," he said.
At a hearing in Brooklyn federal court on Friday, 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 complies with
all of her obligations under the agreement, which ends in December 2022. He
added that Meng will be released on a personal recognizance bond, and that the
United States plans to withdraw its request to Canada for her extradition.
Meng pleaded not guilty to the charges in the hearing. When
U.S. District Court Judge Ann Donnelly later accepted the deferred prosecution
agreement, Meng sighed audibly.
A Canadian judge later signed Meng's order of discharge,
vacating her bail conditions and allowing her to go free after nearly three
years of house arrest.
She was emotional after the judge's order, hugging and
thanking her lawyers.
Speaking to supporters and reporters on the steps of the
court afterward, Meng thanked the judge for her "fairness" and talked
of how the case had turned her life "upside down".
Meng was confined to her expensive Vancouver home at night
and monitored 24/7 by private security that she paid for as part of her bail
agreement. Referred to by Chinese state media as the "Princess of
Huawei," she was required to wear an electronic ankle bracelet to monitor
her movements, which became fodder for the tabloids when it hung above her
designer shoes.
'HUAWEI CONFIDENTIAL'
Articles published by Reuters in 2012 and 2013 about Huawei,
Hong Kong-registered company Skycom and Meng figured prominently in the U.S.
criminal case against her. Reuters reported that Skycom had offered to sell at
least 1.3 million euros worth of embargoed Hewlett-Packard computer equipment
to Iran's largest mobile-phone operator in 2010.
Reuters also reported numerous financial and personnel links
between Huawei and Skycom, including that Meng had served 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 U.S. trade blacklist in 2019 that
restricts sales to the company for activities contrary to U.S. national
security and foreign policy interests. The restrictions have hobbled the
company, which suffered its biggest revenue drop in the first half of 2021,
after the U.S. supply restrictions drove it to sell a chunk of its
once-dominant handset business before new growth areas have matured.
The criminal case against Meng and Huawei is cited in the
blacklisting. Huawei is charged with 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 U.S. court proceedings were over.
Huawei has become a dirty word in Washington, with China
hawks in Congress quick to react to any news that could be construed as the
United States being soft, despite Huawei's struggles under the trade
restrictions.
Then-President Donald Trump politicized the case when he
told Reuters soon after Meng's arrest that he would intervene if it would serve
national security or help secure a trade deal. Meng's lawyers have said she was
a pawn in the political battle between the two super powers.
Republican China hardliners in Congress called Friday's deal
a "capitulation."
"Instead of standing firm against China's
hostage-taking and blackmail, President Biden folded," Republican Senator
Tom Cotton said in a statement.
Senior U.S. officials have said that Meng's case was being
handled solely by the Justice Department and the case had no bearing on the
U.S. approach to strained ties with China.
During U.S. Deputy Secretary of State Wendy Sherman's July
trip to China, Chinese Vice Foreign Minister Xie Feng insisted that the United
States drop its extradition case against Meng.
U.S. officials have acknowledged that Beijing had linked
Meng's case to the case of the two detained Canadians, but insisted that
Washington would not be drawn into viewing them as bargaining chips.
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