(Bloomberg) — Huawei Technologies Co. executive Meng Wanzhou and the U.S. Justice Department reached a deal to resolve criminal charges against her, a breakthrough in a case that raised tensions between China, Canada and the U.S.
Appearing by video, Meng, 49, pleaded not guilty in a Brooklyn courtroom Friday. U.S. government lawyers said they will defer prosecution in the matter and dismiss the charges entirely by Dec. 1, 2022 if Meng complies with terms of the agreement. They will also ask Canadian authorities to release her.
The Huawei chief financial officer was arrested in Vancouver in December 2018 on charges of violating U.S. sanctions. Her detention sparked a diplomatic crisis and retaliatory trade measures by Beijing, which has called it a politically motivated attack on one of its chief technology champions. Meng has spent the last few years fighting extradition to the U.S.
China has frequently linked Meng’s case with that of jailed Canadian citizens Michael Spavor and Michael Kovrig. The two Michaels, as they are known in Canada, were detained in China within days of Meng’s arrest. If the deal with Meng is followed by a reciprocal agreement by Beijing to release them, it would represent a political win for Prime Minister Justin Trudeau, just days after a national election in which he faced stiff criticism from the rival Conservatives over his handling of relations with Beijing.
Officials at China’s embassies in Washington and Ottawa didn’t immediately respond to requests for comment. Spokespeople for Huawei in Canada also didn’t respond to requests for comment.
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The U.S. will withdraw its extradition request for Meng and “promptly notify” Canadian authorities about releasing her, a government lawyer said at the hearing.
Under terms of the agreement, Meng said that she, her lawyers and representatives won’t say anything that contradicts the prosecutors’ Statement of Facts on the case. She also agreed that she won’t say her entering into the agreement with prosecutors was entered unknowingly or coerced.
Prosecutors alleged that Huawei and Meng lied to HSBC Holdings Plc about Huawei’s relationship with a third company that was doing business in Iran, as part of a scheme to violate U.S. trade sanctions on that country. Meng was accused of personally making a false presentation in August 2013 about those ties.
U.S. prosecutors raised the stakes last year by adding racketeering conspiracy charges against Huawei. The company has pleaded not guilty.
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The return of Meng would represent a win for Chinese President Xi Jinping, who is banking on a tough stance with countries including the U.S., Canada and Australia to deliver him kudos at home as he heads into a key leadership meeting of the ruling Communist Party next year.
Meng’s arrest had fueled a deterioration in ties between the US and China, though relations have continued to sour so much that it’s unclear how much Friday’s announcement will actually make things better.
China had long argued that the case was politically motivated or that the U.S. would use Meng as a bargaining chip to achieve other demands. That suspicion appeared to be affirmed in December 2018, when then-President Donald Trump told Reuters in an interview he would intervene in U.S. efforts to extradite Meng if it would help him reach a trade deal.
Given the tensions around the case and the number of other unresolved issues between the US and China, Friday’s deal also spurred speculation that it was part of some broader agreement or that the U.S. got something in return.
Meng, who had denied any wrongdoing during the Canadian extradition proceedings and accused the U.S. of overreach, had faced as many as 30 years in prison if convicted in the U.S.
Trudeau Pressure
As Meng’s case appeared to languish, pressure on Trudeau’s government grew. Last month, a Chinese court jailed Spavor for 11 years on spying charges. But while that decision left the door open for Spavor’s eventual deportation, it sparked more international criticism.
Trudeau condemned the verdict as “absolutely unacceptable and unjust” while David Meale, the top U.S. diplomat in Beijing, called the proceedings a “blatant attempt to use human beings as bargaining leverage.” In a separate statement, U.S. Secretary of State Antony Blinken condemned Beijing’s sentencing and called for the immediate release of all people “arbitrarily” detained in China.
The conviction of Spavor, along with that of Kovrig — a Hong Kong-based analyst at the International Crisis Group and former Canadian diplomat — fueled criticism of the expansion of “hostage diplomacy.” China has repeatedly linked the cases to Meng’s, with a Foreign Ministry spokesman saying last year that halting her extradition “could open up space for resolution to the situation of the two Canadians.”
Trudeau’s incumbent Liberals won a third term this week, but the prime minister was unable to regain majority control of the legislature. The continued detention of the two Michaels remains a central foreign policy issue for his government.
The case is U.S. v. Huawei Technologies Co. Ltd. et al., 18-cr-457, U.S. District Court, Eastern District of New York (Brooklyn).
(Updates with plea in 2nd paragraph.)
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