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Huawei CFO Meng Wanzhou Leaves Canada on a Flight to China

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(Bloomberg) -- Almost three years after she was arrested at a Vancouver airport, Huawei Technologies Co. Chief Financial Officer Meng Wanzhou left Canada on a flight to China on Friday afternoon, according to a person familiar with the matter.

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Meng, who had reached a deal to end U.S. criminal charges against her, departed on a chartered Air China plane bound for Shenzhen, where Huawei has its headquarters, the person added.

Under an agreement with federal prosecutors, Meng, 49, admitted she had misled HSBC Holdings Plc about the telecom company’s business with Iran, in violation of U.S. sanctions on that nation. Meng will face no further prosecution and could see the charges against her dismissed by December 2022 if she complies with the terms of the agreement.

But a larger racketeering indictment is still pending against Huawei, which grinds on even as a broader rivalry between Washington and Beijing sees relations between the two powers at their lowest point in years. Meng’s arrest sparked a diplomatic crisis and retaliatory trade measures by China, which has called her prosecution a politically motivated attack on one of its chief tech champions. With the bank fraud, conspiracy and wire fraud charges against her, Meng, the daughter of Ren Zhengfei, Huawei’s founder, faced as many as 30 years in prison if convicted in the U.S.

The Justice Department said Meng’s admissions “confirm the crux of the government’s allegations in the prosecution of this financial fraud -- that Meng and her fellow Huawei employees engaged in a concerted effort to deceive global financial institutions, the U.S. government and the public about Huawei’s activities in Iran.”

The company has pleaded not guilty.

Supreme Court of British Columbia Associate Chief Justice Heather Holmes discharged Meng after the U.S. said it would withdraw its extradition request. The development clears the way for Meng, who had been under house arrest in Vancouver since December 2018, to return home to China.

Pro-Meng supporters gathered outside court in Vancouver on Friday chanting “Not guilty!” After the hearing, Meng gave big hugs to colleagues as she left the courtroom amid applause. One picked her up off her feet. She thanked her boosters, the Chinese consul and the Canadian people and apologized “for the inconvenience.”

There was at least one detractor, too, as a car came by with the driver shouting out an obscenity against Meng and the Chinese Communist Party, to some cheers. Meng sped off in a black SUV.

Read More: Huawei CFO Freed by Judge, Ending Two-Year Extradition Ordeal

The U.S. said it would pursue its racketeering case against the company.

“Our prosecution team continues to prepare for trial against Huawei, and we look forward to proving our case against the company in court,” Assistant Attorney General Kenneth Polite said in a statement.

David Bitkower and Michael Levy, lawyers for Huawei in the U.S., didn’t immediately return voicemail and email messages seeking comment on Meng’s accord and the impact it might have on their case.

Canada will be looking for clarity on what the decision means for two of its citizens jailed in China after Meng’s detention.

Given the tensions around the case and the number of other unresolved issues between the U.S. and China, Friday’s deal spurred speculation that it was part of some broader agreement or that the U.S. got something in return.

“If this individual from Huawei is able to go home, I would expect there are other pieces to some type of an arrangement, whether there is a quid pro quo, whatever. China has made this a priority,” Richard Haass, president of the Council on Foreign Relations, said on “Balance of Power” on Bloomberg TV on Friday.

The Two Michaels

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 victory 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.

The return of Meng would be 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 kudos at home as he heads into a key leadership meeting of the ruling Communist Party next year.

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.

Read More: China Leaves Room to Release Canadian After Spy Conviction

Appearing by video in federal court in Brooklyn, earlier on Friday from her lawyer’s office in downtown Vancouver, Meng pleaded not guilty. U.S. government lawyers said they would defer prosecution in the matter and dismiss the charges by Dec. 1, 2022, if Meng complies with the agreement, which bars her from contradicting a four-page statement of facts that recites the U.S. case against her.

In the Brooklyn hearing she admitted she made “knowing false statements” to a financial institution not identified by the U.S. In earlier court proceedings HSBC has been identified as the institution.

“Under the terms of this agreement, Ms. Meng will not be prosecuted further in the United States and the extradition proceedings in Canada will be terminated,” one of her lawyers, William Taylor, said in a statement. “She has not pleaded guilty and we fully expect the indictment will be dismissed with prejudice after fourteen months. Now, she will be free to return home to be with her family.”

Prosecutors alleged that Huawei and Meng lied to HSBC about Huawei’s relationship with a third company that was doing business in Iran, as part of a scheme to violate the trade sanctions. 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, alleging it had won international standing by stealing trade secrets in a 20-year pattern of corporate espionage.

While the indictment doesn’t name the businesses from which Huawei allegedly stole intellectual property, details of the allegations match descriptions of companies including Cisco Systems Inc., Motorola Inc. and Cnex Labs Inc.

China had long argued that the U.S. was using 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.

Read More: Day 577 in China Cell -- Ex-Envoy’s Wife Fights in Huawei Standoff

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 his 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 -- fed 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).

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