A senior Chinese executive from Huawei, held in Canada since 2018 on US charges of bank and wire fraud, will be allowed to leave after a deal with prosecutors, removing a major irritant from US-China relations.
Meng Wanzhou, Huawei’s chief financial officer and daughter of the giant corporation’s founder, appeared virtually on Friday at a hearing in New York federal court from Vancouver where she was arrested in December 2018 on a US warrant. She has been under house arrest in the city since then, monitored by a private security company she pays for as part of her bail agreement.
Under the deal, Meng’s prosecution will be deferred until December next year and will be dropped entirely if she complies with her obligations. One of those obligations was not to contradict a statement of facts she signed as her part of the deal – believed to be an admission of some wrongdoing – or suggest that she signed it involuntarily. The US justice department will then drop its extradition proceedings against her.
The full agreement was not immediately made public in the court hearing. Meng was due to appear before the British Columbia supreme court on Friday afternoon, which her lawyers hope will clear the last barrier to her leaving Canada.
The resolution of the Meng case raises hopes that China will free two Canadians, Michael Kovrig, a former diplomat, and Michael Spavor, a businessman, who were arrested days after Meng and charged, without evidence, of spying.
The arrests have significantly worsened Chinese-Canadian relations and have been one of many sources of friction in the US-China relationship. That has been made more fraught in the past few days by the formation of a new security agreement, Aukus, between Australia, the UK and the US, and a White House summit on Friday of the Quad group: the US, India, Japan and Australia.
The Biden administration has been insistent it is looking for areas where the US and China can work together.
Meng was indicted on bank and wire fraud charges for allegedly misleading HSBC bank on Huawei’s activities in Iran.
According to news reports by Reuters in 2012 and 2013, which were referred to in the US case against her, Meng and Huawei were linked to a scheme to sell computer equipment to Iran, in violation of sanctions.
The deal announced on Friday may not automatically resolve diplomatic tensions between the three countries involved, warned Bonnie Glaser, the director of the Asia Programme at the German Marshall Fund of the US
“Attitudes in Canada toward China have soured significantly over the past three years, in large part due to the arrest of the two Michaels,” she said. “Assuming that they are released quickly, Canada-China relations may improve, but only gradually and only if [China] invests a great deal of effort.”
“In US-China relations, there are so many challenges that the resolution of this issue is unlikely to have a major impact,” Glaser added.
Ma Ji, a senior lecturer at Peking University’s School of Transnational Law said there were several factors behind the deal. “China has put much pressure on the US side regarding Meng’s case. Since the beginning, China sees the Meng saga as a response to the US scheme to suppress China’s leading tech industry and regards Washington’s extradition request politically-motivated,” he said.
“And China had given Meng’s case particular weight. For instance, Beijing’s response to the Meng’s arrest in Canada – by taking two Canadian citizens in return – signals that one would play with the fire if they follow the US to undermine China’s core interests,” Ma said, adding that the US justice department may not have been sure of its evidence against Meng to be sufficiently confident in its case.