Huawei Chief Financial Officer Meng Wanzhou has reached an agreement with U.S. prosecutors to end the bank fraud case against her, Assistant U.S. Attorney David Kessler told a New York judge on Friday, a move that should allow her to eventually leave Canada and relieve a point of tension between China and the United States.
A hearing is underway in Brooklyn federal court, where the U.S. government said it will discuss a resolution of charges against Meng, according to a Friday court filing. Meng is attending the hearing virtually from Canada, and pleaded not guilty to the charges.
Meng was arrested at Vancouver International Airport in December 2018 on a U.S. warrant, and was indicted on bank and wire fraud charges for allegedly misleading HSBC (HSBA.L) about the telecommunications equipment giant’s business dealings in Iran, a story reported first by Reuters in 2012.
Reuters was first to report on Friday that the United States had reached a deferred prosecution agreement with Meng. The agreement pertains only to Meng and U.S. charges remain against the company, according to two other people familiar with the matter.
Kessler said the agreement ends in Dec. 2022 and that as long as she doesn’t break the law, the charges will be dropped.
Beyond solving a dispute between the United States and China, the agreement could also pave the way for the release of two Canadians, businessman Michael Spavor and former diplomat Michael Kovrig, who have been held in China since their arrest shortly after Meng was taken in custody in 2018. In August, a Chinese court sentenced Spavor to 11 years in prison for espionage.
A spokeswoman for Huawei declined to comment. An attorney for Meng could not be immediately reached for comment.
Meng, who has also used the English first names “Cathy” and “Sabrina,” has said she is innocent and has been fighting extradition to the United States from Canada. She is confined to Vancouver and monitored 24/7 by private security that she pays for as part of her bail agreement.
“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. At least 13 pages of the proposal were marked “Huawei confidential” and carried Huawei’s logo.
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.
Huawei (HWT.UL) 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 ever 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 and before new growth areas have matured.
