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John Nuttall, left, and Amanda Korody leave jail after a judge ruled the couple were entrapped by the RCMP in a police-manufactured crime, in Vancouver, B.C., on July 29, 2016.DARRYL DYCK/The Canadian Press

A British Columbia man and woman who were cleared of terror charges due to RCMP entrapment are allowed to live freely for the first time in years after prosecutors dropped a bid to restrict their movements, their lawyer says.

The federal Crown withdrew a peace bond application for John Nuttall and Amanda Korody last month, after the B.C. Court of Appeal panel unanimously upheld a trial judge’s ruling that the RCMP manipulated them into planting what they thought were explosives at the legislature.

The decision to drop the application means the couple no longer have to obey conditions such as having to stay away from the B.C. Legislature, Canadian Forces Base Esquimalt and any synagogue or Jewish school, said their lawyer, Scott Wright.

“As of right now, they’re not on any conditions,” he said. “There were 2½ years that they were on conditions with no problem. They complied with them and did everything that was asked of them.”

Mr. Wright said prosecutors launched the peace bond application shortly after B.C. Supreme Court Justice Catherine Bruce tossed out the guilty verdicts owing to police entrapment in 2016.

The peace bond proceedings had been adjourned pending the B.C. Court of Appeal ruling and the Crown dropped its application the same day the court released its decision, Mr. Wright said.

A peace bond hearing scheduled for Monday has been cancelled.

The Public Prosecution Service of Canada said in a statement that it still has 60 days from the Court of Appeal ruling on Dec. 19 to decide whether to seek leave to appeal to the Supreme Court of Canada.

It added that it withdrew the peace bond application on behalf of the Mounties.

The RCMP said they decided to withdraw the application following their continued review of the case after the appeal court’s decision.

Mr. Nuttall and Ms. Korody were arrested on Canada Day 2013 after planting what they thought were pressure-cooker bombs on the grounds of the legislature.

In June, 2015, a jury found Mr. Nuttall and Ms. Korody guilty of conspiring to commit murder, possessing an explosive substance and placing an explosive in a public place on behalf of a terrorist group.

The convictions were put on hold until 2016, when Justice Bruce ruled the naive and marginalized former heroin addicts had been entrapped by police, who she said used trickery, deceit and veiled threats to engineer the bomb plot.

In its appeal, the Crown argued Mr. Nuttall and Ms. Korody were responsible for crafting and carrying out the plan and that an undercover RCMP operation did not qualify as either manipulative or an abuse of process.

Lawyers for Mr. Nuttall and Ms. Korody argued that the couple feared they would be killed by a shadowy terrorist group if they didn’t follow through with the bomb plot.

The defence also argued police provided Mr. Nuttall with improper spiritual advice that deflected his qualms about whether terrorism was compatible with his new faith after the couple had converted to Islam.

The B.C. Court of Appeal ruling in December found that while the trial judge made some errors, she did not err in finding that Mounties manipulated Mr. Nuttall and Ms. Korody.

“I, therefore, agree with the trial judge that the overall conduct of this investigation was a travesty of justice,” Justice Elizabeth Bennett wrote on behalf of a three-judge panel.

The appeal court ordered a stay of proceedings.

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