Uncle Sam throws Huawei CFO a bone in her extradition fight, but deal will require an admission of wrongdoing

Deferred prosecution agreement offered to Meng Wanzhou


US prosecutors have reportedly offered Huawei CFO Meng Wanzhou a deferred prosecution agreement. If accepted, the deal will have charges deferred and eventually dismissed, but will require Meng to admit to wrongdoing.

Meng is under house arrest in Vancouver, Canada, where she owns two homes, awaiting extradition to the US. The Justice Department is seeking her removal over claims she misled HSBC over Huawei's business dealings in Iran, resulting in the banking giant falling foul of US sanctions against the country.

The US government claims Meng lied to HSBC in 2009 about Huawei's ties to an Iran business, SkyCom, while attempting to secure a $1.5bn loan. It alleges SkyCom wasn't merely a local partner, as Huawei claims, but rather an unofficial subsidiary fully controlled by the troubled Chinese tech biz.

Huawei has also been accused of using SkyCom to export millions of dollars of computer equipment to telecos in Iran that are linked to the nation's government, as well as its armed forces. These include server and data centre hardware made by Hewlett-Packard, as well as software from Microsoft, Symantec, and Novell.

At the time of the alleged offence in late 2010, the recipient, Mobile Communication Co of Iran, was controlled by a consortium of rather nasty characters. These include the Islamic Revolutionary Guard Corps, which is designated as a terrorist organisation by the United States, as well as the nation's Supreme Leader, Ayatollah Ali Khameni.

US sanctions prohibit any form of trade with the nation's government and military, which extends to the largely civilian computer equipment allegedly provided by Skycom. Exemptions exist for information technology products designed to support personal communications among Iranians (like mobile phones), as well as those intended to support democracy in Iran.

According to Reuters, Meng is reluctant to admit wrongdoing, which, if she did, would provide extra ammunition for the US government in its fight against Huawei.

If she refuses to accept this agreement, it's all but certain the case will continue to rumble on. In the absence of any deals, the proceedings are expected to reach a natural conclusion in late April 2021.

Earlier this year, Meng's case experienced a major setback after a Canadian court ruled that the allegations levied against her met the threshold of "double criminality", which is required for an extradition to commence.

Her counsel argued that because the crime allegedly took place in 2009, one year before Canada imposed its own punishing sanctions against Iran, her actions would not have been a crime if they occurred north of the border.

British Columbia's Superior Court Associate Chief Justice Heather Holmes rejected this, noting that bank fraud is just as illegal in Canada as it is in the United States.

Meng's team also claims Canadian border officials violated her constitutional rights by seizing and unlocking her personal electronic devices, and sharing the contents with the Royal Canadian Mounted Police. This, they say, constitutes a serious abuse of process.

The Register has asked Huawei to comment. ®

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