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Huawei chief financial officer Meng Wanzhou, centre, talks to media in Vancouver after her extradition hearing ended in her favour.DON MACKINNON/AFP/Getty Images

The latest: China welcomes Huawei executive Meng Wanzhou home, but stays silent on freed Canadians

Meng Wanzhou, the chief financial officer of Huawei Technologies, has reached a deferred prosecution agreement with the U.S. Justice Department allowing her to return to China nearly three years after she was detained in Canada at the request of the United States on bank fraud charges.

The Huawei executive left Vancouver on Friday evening on an aircraft bound for Shenzhen, China.

The U.S. plea deal contains no mention of Canadians Michael Spavor and Michael Kovrig, whom China locked up in December, 2018, in apparent retaliation for the arrest of Ms. Meng, a member of China’s corporate elite. The Canadian government has been kept abreast of the U.S. legal negotiations with Ms. Meng, but officials would not say whether there is a side agreement between Washington and Beijing that would free the two men, whom Canada has said are victims of hostage diplomacy.

Ms. Meng appeared by teleconference on Friday before a U.S. federal court in Brooklyn, where a judge approved the legal arrangement between the United States and the Huawei executive. In the deal, she accepted a significant portion of the U.S. government’s case against her, including an attempt to evade U.S. sanctions against Iran. But she did not have to pay a fine or enter a guilty plea as part of the arrangement, in which the charges will be deferred and then dismissed on Dec. 1, 2022.

In the agreement, which is not an admission of guilt, Ms. Meng accepted that she made “untrue” statements to bankers about Huawei’s relationship with Skycom Tech Co. Ltd., which conducted business in Iran and was in fact controlled by the Chinese company. She accepted that Huawei caused Skycom to conduct about $100-million worth of U.S.-dollar transactions via a bank that cleared them through the United States – “at least some of which supported its work in Iran in violation of U.S. law.”

Her acceptance of these facts as part of the deal could help the United States in its continuing prosecution of Huawei over alleged violations of U.S. sanctions law.

“In entering into the deferred prosecution agreement, Meng has taken responsibility for her principal role in perpetrating a scheme to defraud a global financial institution,” Nicole Boeckmann, acting United States attorney for the Eastern District of New York, said in a statement. “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.”

Ms. Meng appeared later in the day in a Vancouver courtroom, where the extradition proceedings were stayed and her bail conditions lifted, allowing the Chinese telecom executive to leave the country.

At the close of proceedings in B.C. Supreme Court, after the Canadian Justice Department withdrew the case against Ms. Meng, Associate Chief Justice Heather Holmes thanked Ms. Meng for her co-operation.

“You have been co-operative and courteous throughout. The court appreciates and thanks you for that.”

“Thank you, my lady,” Ms. Meng replied in English. She later burst into tears as she hugged her lawyers.

“Now, she will be free to return home to be with her family,” Ms. Meng’s U.S. lawyer William Taylor said in a statement, noting his client “will not be prosecuted further in the United States.”

Ms. Meng has been out on bail and living in a $13.7-million Vancouver home while Mr. Kovrig and Mr. Spavor have been in Chinese jail cells where the lights are on 24 hours a day.

Backgrounder: Inside the final hours that led to the arrest of Huawei executive Meng Wanzhou

China has convicted Michael Spavor and is still keeping Michael Kovrig in jail. The Canadians’ story so far

U.S. Justice Department, Meng Wanzhou in talks on plea deal

Speaking to reporters after her court appearance, Ms. Meng thanked Justice Holmes “for her fairness” and the Canadian government “for upholding the rule of law.”

Ms. Meng talked of how hard this has been for her: “My life has been turned upside down. It was a disruptive time for me as a mother, a wife and a company executive.”

The Globe and Mail reported on Sept. 17 that the U.S. Department of Justice had resumed talks on a deal with Huawei and lawyers for Ms. Meng, daughter of Ren Zhengfei, founder of the Chinese telecommunications giant. This followed a hiatus in negotiations since late 2020, when the U.S. government under the Trump administration’s Justice Department first attempted talks with Ms. Meng.

A former federal prosecutor in the United States said he could not remember another prosecution involving a high-profile person, with so much time and resources put into it by U.S. authorities, that ended in a deferred prosecution agreement with a simple release and no provision for ongoing co-operation.

“I would even probably call it a rare use of a deferred prosecution agreement,” said Michael McAuliffe, a former federal prosecutor who has worked in the U.S. Department of Justice in Washington and as an assistant U.S. attorney in South Florida. “One gets the sense that they’ve come up short of their original objectives.”

He said the agreement means Ms. Meng is essentially free of any involvement with U.S. prosecutors.

“Because the agreement has no co-operation provision (and no requirement of even being accessible to prosecutors) and she will be in China at least until the end of the agreement, her involvement in the matter and with the U.S. authorities appears over,” Mr. McAuliffe said in an e-mail. “A stunning change from being on an ankle bracelet ... and facing extradition, trial and potential imprisonment.”

Canadian government officials in Ottawa refused to discuss the U.S. deal and whether there is a side agreement with Beijing that would lead to freedom for the two Michaels. Any discussions about the release of the two Canadians would involve the Chinese government, and China experts are unsure how quickly Beijing will free them.

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Supporters of Huawei Technologies Chief Financial Officer Meng Wanzhou wave signs outside the B.C. Supreme Court during a hearing about Meng’s release in Vancouver.JESSE WINTER/Reuters

Guy Saint-Jacques, a former Canadian ambassador to China, said the Meng plea deal could lead to a return of the two Michaels as early as the end of October.

Mr. Saint-Jacques said he expects Canada and China will begin negotiations on their return immediately after Ms. Meng arrives back home.

China is motivated to end the Kovrig and Spavor cases because of an international outcry over them, he said.

“The Chinese know their image has been tarnished by all of this and they want to turn the page, and so it’s in Canada’s interest to remain firm.”

But Mr. Saint-Jacques warned that Beijing will seek to extract concessions from Prime Minister Justin Trudeau in return for handing over the two men, suggesting this could include requiring the Canadian leader to attend the 2022 Winter Olympics in Beijing. A cloud of controversy hangs over the February games, with calls for a boycott over Beijing’s repression of Muslim minorities and its draconian crackdown on democracy in Hong Kong.

“If China were to say, ‘We will free the two Canadians if the Prime Minister promises to come to the opening ceremonies of the 2022 Olympics,’ I think Mr. Trudeau should refuse that. It would be unacceptable,” he said.

Mr. Saint-Jacques said that during negotiations in 2016 to free Canadian Kevin Garratt from China, Beijing sought agreement from Mr. Trudeau’s government to negotiate an extradition treaty, and a special arrangement to discuss cases that require the involvement of embassies away from the political spotlight.

“They [the Chinese] were mad every time a Canadian prime minister would raise high-profile consular cases with the Chinese leader,” he said.

Canada did not agree to the terms.

The Canadian government had been pressing the Biden administration to reopen negotiations with Ms. Meng and Huawei lawyers for a DPA to help end the dispute, which put Ottawa in the middle of a superpower standoff between Washington and Beijing.

China accused Canada of acting as a U.S. puppet by detaining Ms. Meng and slapped punitive trade sanctions on some Canadian agriculture products after the arrest of Mr. Kovrig and Mr. Spavor.

In June, The Globe reported that Canada’s ambassador to China, Dominic Barton, was in Washington for three weeks this spring in talks with senior officials in the Biden administration aimed at facilitating the release of the two Canadians.

Mr. Barton met with officials from the White House National Security Council and the departments of Justice, State, Defense, Treasury and Commerce. He also held talks with Cui Tiankai, China’s ambassador to the United States.

China put Mr. Kovrig and Mr. Spavor on trial in March of this year. They were charged with spying as part of a process that Canada and dozens of allies call arbitrary detention on bogus charges in a closed system of justice with no accountability.

A Chinese court in August found Mr. Spavor guilty of espionage and sentenced him to 11 years in prison. He has appealed the ruling. The verdict for Mr. Kovrig has yet to be announced.

With a report from Sean Fine, Michael Hager and Wendy Stueck

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