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Huawei CFO leaves Canada after U.S. agreement on fraud charges, detained Canadians head home

Stock MarketsSep 25, 2021 11:11AM ET
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2/2 © Reuters. FILE PHOTO: Huawei Technologies Chief Financial Officer Meng Wanzhou exits court at the conclusion of a hearing in Vancouver, British Columbia, Canada, August 18, 2021. REUTERS/Jennifer Gauthier 2/2

By Karen Freifeld, Kenneth Li, Moira Warburton and David Ljunggren

(Reuters) -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.

The deal also opens U.S. President Joe Biden 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 https://www.reuters.com/article/us-usa-china-huawei/top-huawei-executive-arrested-on-u-s-request-clouding-china-trade-truce-idUSKBN1O42S1 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 https://www.reuters.com/technology/huawei-cfo-meng-appear-brooklyn-federal-court-2021-09-24 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.

China's foreign ministry did not immediately respond to a request for comment on the release of Meng or the Canadians.

A spokeswoman for Huawei declined to comment.

A person familiar with the matter said Meng - the daughter of Huawei founder Ren Zhengfei https://www.reuters.com/business/huawei-heir-apparent-prepares-life-after-three-years-canada-court-battle-2021-09-24 - 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 https://www.reuters.com/article/china-canada-spavor-idCNL1N2PI07Y Spavor to 11 years in prison for espionage.

The International Crisis Group, where Kovrig works, said it was "overjoyed" at the "most just decision" to release him, thanking Canada and the United States for their roles. "The day we have been waiting for 1,020 days has finally arrived," the advocacy group said in a statement.

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 https://www.reuters.com/article/us-iran-huawei-hp/exclusive-huawei-partner-offered-embargoed-hp-gear-to-iran-idUSBRE8BT0BF20121230 and 2013 https://www.reuters.com/article/uk-huawei-skycom/exclusive-huawei-cfo-linked-to-firm-that-offered-hp-gear-to-iran-idUKBRE90U0CA20130131 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.

CHINA VS USA

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.

Huawei CFO leaves Canada after U.S. agreement on fraud charges, detained Canadians head home
 

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Comments (30)
Blessing Louis
Blessing Louis Sep 25, 2021 3:46PM ET
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that's cool things
king michael
king michael Sep 25, 2021 1:37PM ET
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Canada is an amazing country. Killed millions of native Indian women, girls and kids and took their land. Now even helping and protecting drug dealers.
HD HD
HD HD Sep 25, 2021 1:37PM ET
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what are you even talking about ? you sure your not on drugs ?
Blessing Louis
Blessing Louis Sep 25, 2021 1:37PM ET
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that's cool
John Hat
John Hat Sep 25, 2021 1:25PM ET
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China is a thugocracy.
king michael
king michael Sep 25, 2021 12:54PM ET
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Using a $ millionaire CFO to exchange for two drug dealers? This lady spend at least a few $million a year and creating many high income jobs if stay in Canada. What does Canada need the two drug dealer for? So D****M
bret lafrance
bret lafrance Sep 25, 2021 12:29PM ET
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now that's the pot calling the kettle black, who can be trusted these days?
hung san tan
hung san tan Sep 25, 2021 12:24PM ET
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American cannot be trusted
bret lafrance
bret lafrance Sep 25, 2021 9:04AM ET
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Bad decidion by someone to try and get around the embargo for a million euros of hardware, must be more to the story, but seems like a situation that got away from everyone. Simplify
Antonio Velardo
Antonio Velardo Sep 25, 2021 2:41AM ET
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What had she done? Making business with a country when another country says nobody must do it?
Phung Luong
Phung Luong Sep 25, 2021 2:41AM ET
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u should put in situation. what is the country ? Iran ? hope u know Iran well, and China? the western people like u always think by your knowledge, your culture your view but u never know about the others. u want to justice for all people, all the world, all country ? u should learn deeply about the history of them, specially China, thousands years they slave other country and other minority, and now nothing change. the USA and western country make China stronger and stronger and now all the world must pay for it, and it not stop by Corona, wait to open your eyes.
Phung Luong
Phung Luong Sep 25, 2021 2:41AM ET
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u should put in situation. what is the country ? Iran ? hope u know Iran well, and China? the western people like u always think by your knowledge, your culture your view but u never know about the others. u want to justice for all people, all the world, all country ? u should learn deeply about the history of them, specially China, thousands years they slave other country and other minority, and now nothing change. the USA and western country make China stronger and stronger and now all the world must pay for it, and it not stop by Corona, wait to open your eyes.
David David
David9 Sep 25, 2021 2:41AM ET
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I am afraid you know nothing... please go get educated and stop reading Fake News... you seem to know nothing about real life...
Antonio Velardo
Antonio Velardo Sep 25, 2021 2:41AM ET
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David David , you are amswearinh to Phung Luong, right?
travert xavier
travert xavier Sep 25, 2021 2:41AM ET
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As I know slavery was much more an American/European business than a Chinese one.. might you provide historical example of your statements ? time periods, enslaved population, kingdoms.. ?
九门提督 五城武公
九门提督 五城武公 Sep 25, 2021 1:59AM ET
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looks like hostage exchange. disgust me. Only wicked Biden and Canadian administration can do this.
九门提督 五城武公
九门提督 五城武公 Sep 25, 2021 1:58AM ET
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looks like hostage exchange. disgust me. Only wicked Biden and Canadian administration can do this.
Necleus Electron
Necleus Electron Sep 25, 2021 1:28AM ET
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Investing Man, i dont need any non constructive comments from you. Just for goodness sake, dont waste the platform page giving redundant worthless comments.
Necleus Electron
Necleus Electron Sep 25, 2021 1:25AM ET
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This is what i dont like. Why the world has to take instructions from a country?? What gives US the authority and rights to announce and impose sanctions as and when they like, especially when nations are not on the same page with them??? What makes US think they are the saint and rest are rougue nations? What i know is every nation has their own cultures, their way of doing things. You dont go around the world preaching human rights, democracy yet you are the biggest racists and hypocrite at home!
David David
David9 Sep 25, 2021 1:02AM ET
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Ms. Meng will go down the history book as a great hero for chinese all over the world.
Md Bayzid
Md Bayzid Sep 25, 2021 12:17AM ET
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Nice to see you
Dexamethasone xie
Dexamethasone Sep 24, 2021 11:45PM ET
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Alstom is crying too
Honey Badger
Honey Badger Sep 24, 2021 10:13PM ET
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its political tactics to ditch each other and using people as tool just unbelievable 🙄
du ich
du ich Sep 24, 2021 10:13PM ET
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eyes vs eyes teeth vs teeth. is it in bible ?
David Dl
David Dl Sep 24, 2021 9:05PM ET
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Biden got so much from china finally we can see who is the boss. Since Biden as president the oposition to china is fake. And preffer no talk how much property china own in USA is billions but USA own nothing in china
du ich
du ich Sep 24, 2021 9:05PM ET
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absolutely wrong. US has lot of interest in China
Daniel Hodel
Daniel Hodel Sep 24, 2021 8:38PM ET
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Money isn’t everything, it the only thing. America has been for sale since 1986. Thank the republicans for their “free market capitalism.” Reagan got the debt clock ticking, while starting the war on drugs. Another waste of time & money. If republicans could elect a candidate under the age of 60, maybe they would stand a chance!
Darren Caris
Darren Caris Sep 24, 2021 8:38PM ET
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DeSantis will crush any Dem.
Kwong To
Kwong To Sep 24, 2021 8:38PM ET
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The Chinese are merely using the printed US dollars to exchange them for real stuff in US. Fair?
king michael
king michael Sep 24, 2021 2:45PM ET
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When will China release the two Canada drug dealers and return their drugs?
Victor Ho
Victor Ho Sep 24, 2021 2:45PM ET
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Never . They are criminals
du ich
du ich Sep 24, 2021 2:45PM ET
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No. The canadian drug dealer was arrested many years years ago.
Yoon Kim
Yoon Kim Sep 24, 2021 2:45PM ET
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du ich  He was sentenced to ten years' imprisonment and deported. I don't know what kind of transactions he made with local Chinese officials, but this is obviously a violation of Chinese law. But he felt that ten years was too long and chose to appeal, so the high court gave him the death penalty……
du ich
du ich Sep 24, 2021 2:45PM ET
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we talk about the canadian drug dealer who was sentenced to death by Chinese Court.
du ich
du ich Sep 24, 2021 2:45PM ET
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the drug dealer will not get deported.
king michael
king michael Sep 24, 2021 2:33PM ET
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In all the US top colleges and research institutes, you barely see any scientist was born in US. Time to close all the top colleges and institutes and send those foreign scientists to their home countries.
Lily Wang
Lily Wang Sep 24, 2021 2:33PM ET
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If so, those colleges would be bankrupt.
du ich
du ich Sep 24, 2021 2:33PM ET
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if US did so as you suggest, many countries would say God bless
Kwong To
Kwong To Sep 24, 2021 2:33PM ET
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These shows that most Americans are just average at best. Without any of these foreign talent, Americans can continue to live in caves.
Ac Tektrader
Ac Tektrader Sep 24, 2021 2:17PM ET
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most of Huawei's technology was built on technology developed my western corporations and stolen by the Chinese government. China needs to be isolated from western technical developments. these same technologies are being used to threaten their neighbors and to strengthen dictatorship and authoritarian control of Chinese citizens.
Empire Destroyer
Empire Destroyer Sep 24, 2021 2:17PM ET
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And US start and join wars for oil, resource and world ***.. your point is?
dav lo
dav lo Sep 24, 2021 2:17PM ET
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u ignoring tge fact that many USA companies setup their factories, RnD, headquarters in China, FB Google Cisco Apple, it is yr responsibilty and yr wish going into China territory, No one force you go in unless Usa want to isolate yr self. You are taking advantage of cheap labor instead of US labor, that is yr problem, not China.
Yellow Drill
Yellow Drill Sep 24, 2021 2:17PM ET
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Empire Destroyer  China should go back to using paint brushes and writing paper.
du ich
du ich Sep 24, 2021 2:17PM ET
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Nonsense. Huawei owns many patents US company never had.
Carrascal Eduardo
Edouard Sep 24, 2021 1:33PM ET
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We should rejoice at this news. Over time, the lack of motives and substance will be demonstrated both against Meng afaire,, 3 years kidnapped, as well as against the two Canadian natives, and against Huawei it self. Company crushed, for more than spurious reasons, in terms of technological leadership, your much championed by Chinese, and unbearable by the USA, victime of insufferable awakening, asleep for years in 5G technology, in which she continues to hobble between the hands of 2/3 ducks lame. That is blind and useless politiquilla politicienne for those interested and the whole world
hung san tan
hung san tan Sep 24, 2021 1:23PM ET
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pity Canada.....have to be a good husky to US
zhen WILLIAMS
zhen WILLIAMS Sep 24, 2021 12:05PM ET
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What a shame! China government jailed two Canadian citizens and revenged Canada with trades.
du ich
du ich Sep 24, 2021 12:05PM ET
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it is right way to negotiate with the west politicians. understood
John che
John che Sep 24, 2021 11:43AM ET
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what a shameful tactic played by US to gain compatitive edge in the tech sector. the tectic may work in someway but hurt our reputation badly. Sad.
 
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