CHINA’S POSITION ON the return of Huawei’s CFO Meng Wanzhou after nearly three year’s detention in Canada fighting an extradition request to face criminal fraud charges in the United States is clear: it has won a complete victory.
US Department of Justice prosecutors announced a deferred prosecution agreement on Friday under which Meng admitted misleading HSBC into processing transactions for Huawei that breached sanctions against Iran. In return, her prosecution on bank and wire fraud charges, to which she pleads not guilty, halts and the charges will be formally dropped by the end of next year if she complies with the agreement.
The extradition request against her thus became moot and was withdrawn. Meng was immediately released by the Canadians and boarded a plane chartered by the Chinese government to take her home to Shenzhen, posting to WeChat en route:
I am currently flying over the North Pole, heading in the direction of home, soon to enter the embrace of our great motherland. Under the leadership of the Chinese Communist party, our motherland is heading toward prosperity. If it was not for our strong motherland, we would not have the freedoms of today.
She did not mention what the one senior FBI official described as her admission as ‘evidence of a consistent pattern of deception to violate US law.’ All search results on Weibo relating to her admission of misleading HSBC are reportedly being blocked.
Foreign Ministry spokesperson Hua Chunying said:
Facts have proven that it is a political persecution case targeting a Chinese national with the aim of suppressing Chinese high-tech companies…The so-called fraud charges against Meng are nothing but pure fabrication…What the United States and Canada have done is a typical case of arbitrary detention.
It is the mirror image of the view Canadians will have of the detention of ‘the two Michaels‘, two Canadian nationals detained in China on espionage charges shortly after Meng’s arrest in Canada and released soon after her release on Friday.
Michael Spavor, who ran cultural exchanges with North Korea, was jailed for 11 years in August after being found guilty. The case of Michael Kovrig, a former diplomat, was still before the courts.
Throughout, authorities have maintained that the two cases were not connected with Meng’s while occasionally linking the two indirectly. However, the two Canadians were widely regarded in the West as diplomatic hostages in the Meng case.
While Canada has got its two citizens returned home, it is more difficult to see what the United States has gained. The US Department of Justices has published the deferred prosecution agreement, but there may be more unreleased detail concerning it to come out or even a secret side-deal.
We do know from reading the agreement that the deal requires Meng to refrain from saying anything that contradicts US prosecutors’ stated facts about the case, which are laid out in a four-page appendix to the agreement. This in a nutshell says that in a 2013 presentation to ‘financial institution 1’, Meng misrepresented the relationship between Huawei and Skycom, which operated in Iran, as a business partnership when in fact Huawei controlled Skycom. This caused the bank to provide banking services, that broke US sanctions against Iran.
However, any hopes that Meng’s release will ease strained US-China tensions to any significant degree appear optimistic.
True, Meng’s case was a particular and personalised irritant in bilateral relations because she was the daughter of Huawei’s founder Ren Zhengfei. Nonetheless, a larger US racketeering indictment against Huawei will continue, bolstered by Meng’s admissions in the agreement.
The company says it will defend itself against vigorously, and US-China relations remain fraught, the more so, the more triumphant the reaction in China to Meng’s return.
In that light and at this point pending the revelation of more quid pro quos, the outcome to Meng’s case seems a big win for China, a moderate success for Canada and not much of anything at all for the United States. However, we suspect the other half of the story is still to be told.