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Huawei CFO strikes deal with U.S. over fraud charges, allowing her to return to China

Sept. 24 (Reuters) – Meng Wanzhou, Huawei’s chief financial officer, has reached an agreement with U.S. prosecutors to end bank fraud proceedings against them, officials said on Friday.

The year-long extradition drama has been a central source of discord in the increasingly fragile Beijing-Washington relations, with Chinese officials signaling that the case must be closed in order to end a diplomatic standoff between the world’s two greatest powers.

The deal also opens US President Joe Biden to criticism from China hawks in Washington, who argue that his government is surrendering to China and one of its top corporations at the center of a global technology rivalry between the two countries.

NS got arrested at Vancouver International Airport in December 2018 against a US arrest warrant and was charged with allegedly misleading HSBC for bank and wire transfer fraud (HSBA.L) 2013 on the business relationships of the telecommunications device giant in Iran.

Her arrest sparked a diplomatic storm and dragged Canada into battle when China arrested two Canadians, a businessman and a former diplomat, shortly after Meng was arrested. Beijing has publicly denied that the arrests were related.

In one (n exclusive On Friday, Reuters reported that the United States had reached a postponed prosecution agreement with Meng. Nicole Boeckmann, the acting US attorney in Brooklyn, said that “By entering into the agreement, Meng assumed responsibility for her lead role in the execution of a fraud scheme for a global financial institution.”

The deal only affects Meng, and the U.S. Department of Justice said it was preparing for a trial against Huawei and looking forward to proving its case in court.

A Huawei spokeswoman declined to comment.

A person familiar with the matter said Meng flew back to China on Friday evening.

At a hearing in federal court in Brooklyn on Friday that Meng virtually attended from Canada, U.S. Assistant Attorney David Kessler said the government will drop charges against them if it fulfills all of its obligations under the agreement imposed on it He added that Meng will be released against a personal guarantee of recognition and that the United States is planning to withdraw its extradition request to Canada.

NS – the daughter of Huawei founder Ren Zhengfei – pleaded not guilty at the prosecution hearing. When U.S. District Court judge Ann Donnelly later accepted the deferred prosecution agreement, Meng sighed audibly.

A Canadian judge later signed Mengs Discharge orderto lift her bail and allow her to be released 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, Meng thanked the judge for her “fairness” and talked about how the case had “turned her life upside down”.

In addition to settling a dispute between the US and China, the deal could also pave the way for them Release of the two Canadians, Businessman Michael Spavor and former diplomat Michael Kovrig, who were detained in China. In August, a Chinese court sentenced Spavor to 11 years imprisonment for espionage.

Meng Wanzhou, Huawei Technologies Chief Financial Officer, is leaving to attend a trial in Vancouver, British Columbia, Canada on September 24, 2021. REUTERS / Taehoon Kim

Meng was locked in her expensive Vancouver home at night and was monitored around the clock by a private security guard she paid as part of her bail agreement. Called the “Princess of Huawei” by the Chinese state media, she had to wear an electronic ankle cuff to monitor her movements, which became food for the tabloids over her designer shoes.

In contrast, the Canadians have no access to the outside world beyond occasional consular visits, and their trials took place behind closed doors.

“HUAWEI CONFIDENTIAL”

Articles published by Reuters in 2012 and 2013 Via Huawei, the Hong Kong-registered company Skycom and Meng played a prominent role in the US criminal case against them. Reuters reported that in 2010 Skycom had offered Iran’s largest mobile operator to sell embargoed Hewlett-Packard computer equipment worth at least 1.3 million euros.

Reuters also reported on numerous financial and personal ties between Huawei and Skycom, including Meng serving on Skycom’s board of directors between February 2008 and April 2009. The stories prompted HSBC to question Meng about Reuters’ results.

Huawei (HWT.UL) was blacklisted for US commerce in 2019, restricting sales to the company for activities that are contrary to US national security and foreign policy interests. The restrictions have prevented the company, which suffered its biggest slump in sales in the first half of 2021 after U.S. delivery restrictions caused it to sell part of its once-dominant cell phone business before new areas of growth mature.

The criminal case against Meng and Huawei is blacklisted. Huawei is accused of acting as a criminal company, stealing trade secrets and defrauding financial institutions. It has pleaded not guilty.

A Canadian government official said Ottawa would not speak out until the US trial was completed. Kovrig’s wife declined to comment. Spavor representatives were not immediately available for comment.

CHINA VS USA

Huawei has become a dirty word in Washington as China hawks in Congress are quick to react to any news that could be construed as soft despite Huawei’s struggles under trade restrictions.

Then-President Donald Trump politicized the case when he told Reuters shortly after Meng’s arrest that he would intervene if it were to serve national security or a trade deal. Meng’s lawyers said she was a pawn in the political battle between the two superpowers.

The Republican China hardliners in Congress called Friday’s deal a “surrender.”

“Instead of standing firm against China’s hostage-taking and extortion, President Biden has pooled,” Republican Senator Tom Cotton said in a statement.

Senior US officials said Meng’s case will be handled solely by the Justice Department and that the case will have no bearing on US attitudes to strained relations with China.

During the US Secretary of State Wendy Sherman’s trip to China in July, China’s Vice Secretary of State Xie Feng insisted that the United States suspend its extradition proceedings against Meng.

US officials admitted Beijing had linked the Meng case to the case of the two detained Canadians, but insisted that Washington would not be tricked into viewing them as bargaining chips.

Reporting by Karen Freifeld, Kenneth Li, Jonathan Stempel, David Shepardson, and Michael Martina; Adaptation by Chris Sanders and Edward Tobin

Our standards: The Thomson Reuters Trust Principles.

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