Huawei Executive Accepts Deal Freeing Her; Case Strained U.S.-China Ties

The Justice Department reached an agreement on Friday that clears the way for Huawei Technologies’ chief financial officer, Meng Wanzhou, to return to China in exchange for admitting wrongdoing in a fraud case.

Ms. Meng, who has been detained in Canada since 2018, agreed to a deal in which federal prosecutors will defer and then ultimately drop the charges against her. The agreement was entered into the record during a hearing in federal court in Brooklyn on Friday.

The case had become a symbol of the tumultuous relationship between two global superpowers, the United States and China, which is at its lowest level in decades. It also created a diplomatic challenge that put Canada square in the middle.

The deal will ease a large irritant in relations between the United States and China.

The Canadian authorities arrested Ms. Meng, 49, the technology giant’s chief financial officer, in December 2018 at Vancouver International Airport, at the request of the United States. Ms. Meng, the daughter of Huawei’s founder and chief executive, Ren Zhengfei, instantly became one of the world’s most famous detainees.

Following the U.S. agreement, Ms. Meng was discharged late afternoon by a Vancouver court late Friday afternoon, where her extradition proceedings had taken place. After all her bail conditions removed, she wiped away tears and gave her lawyers long hugs.

Outside of court, Ms. Meng told Canadians, “Your kindness will always be remembered.”

In January 2019, the Justice Department indicted Ms. Meng and Huawei. It accused them of a decade-long effort to steal trade secrets, obstruct a criminal investigation and evade economic sanctions on Iran.

The charges underscored efforts by the Trump administration to directly link Huawei with the Chinese government after long suspecting that the company had worked to advance Beijing’s economic and political ambitions and undermine American interests.

Ms. Meng’s release could play into the fate of two Canadians imprisoned in China.

China detained the former diplomat Michael Kovrig and the businessman Michael Spavor, soon after Ms. Meng’s arrest, in what has been widely viewed in Canada as hostage diplomacy. China has denied that the events were connected. In August, a court in northeastern China, where Mr. Spavor has lived, sentenced him to 11 years in prison after declaring him guilty of spying.

If the two men are released, it could provide a lift to Prime Minister Justin Trudeau of Canada, who was re-elected this week with a minority government after calling an unpopular snap election. Mr. Trudeau’s inability to secure their freedom has cast a shadow over his premiership.

As of Friday afternoon, Mr. Trudeau and members of his cabinet had remained silent about the Meng deal.

Throughout her extradition hearing in Canada, Ms. Meng’s defense team professed her innocence. They argued that President Donald J. Trump had politicized her case and that her rights had been breached when she was arrested in Vancouver.

Judge Ann M. Donnelly said at the hearing that Ms. Meng had been charged with conspiracy to commit bank fraud, conspiracy to commit wire fraud and with wire fraud. Ms. Meng, who appeared by videoconference for Friday’s hearing, smiled and nodded in response.

Prosecutors said that under the deferred prosecution agreement, the Justice Department would withdraw its extradition request to the Canadian authorities, clearing the way for her release provided that she adheres to the agreement’s terms. They said that the charges would be dropped on Dec. 1, 2022.

Nicole Boeckmann, acting U.S. attorney for the Eastern District of New York, said in a statement that Ms. Meng had “taken responsibility” for her role in fraudulently deceiving a global financial institution into doing business with a Huawei subsidiary in Iran in violation of U.S. law.

She did not name the bank, but extradition proceedings against Ms. Meng in Vancouver identified HSBC as the main institution in question.

Ms. Boeckmann said prosecutors would continue to pursue their case against Huawei.

In an interview, Michelle Levin, a member of Ms. Meng’s legal team, said she was pleased that “Ms. Meng is free to go home and be with her family.”

While waiting for her case to begin, Ms. Meng was seen on a television screen in the Brooklyn court, sitting in her lawyer’s office in Vancouver, sipping tea, a large diamond ring glistening on her left hand.

The deal to release Meng Wanzhou could reduce a nettlesome conflict in U.S.-China relations.

President Donald J. Trump took an aggressively adversarial stance toward China, castigating Beijing for what he called unfair trade policies, blaming it for the coronavirus pandemic, blocking Chinese technology companies from the lucrative American market and imposing heavy tariffs on Chinese exports. The Trump administration also accused Huawei of stealing technology from its Western rivals.

Since coming to office, President Biden has also taken a tough position on China. He has sought to establish the United States as a democratic counterpoint to the authoritarian country, stressing the importance of the West being independent from Chinese technology companies like Huawei, the maker of next-generation communications networks.

But American officials have also sought common ground in areas like climate change and now the Huawei deal.

In their first conversation in seven months, Mr. Biden spoke in early September with President Xi Jinping of China, expressing concern over China’s cyber-activities while arguing that the leaders of the world’s two largest economies could set aside their differences to work together on measures to address global warming. It was only the second time that the leaders had spoken since Mr. Biden’s inauguration, a measure of the rising tensions between the two nations as they seek to tame each others’ global influence.

The Huawei case has deeply undermined perceptions of China in Canada, which has become a hub for Huawei’s research and development operations and also hosts a large number of Chinese students. China is Canada’s second largest trading partner after the United States.

According to a May study by the Angus Reid Institute, a leading polling company, just 14 percent of Canadians have a favorable view of China. A majority of respondents said that China’s freeing of the two Canadians who were detained soon after Ms. Meng’s arrest was a necessary condition for revamping relations.

Gordon Houlden, director emeritus of the China Institute at the University of Alberta, cautioned that Ms. Meng’s release would not radically shift Canada-China relations in the short-term. But he said that it could help spur a healing of sorts, in particular by emboldening closer economic and educational ties between the two countries.

“Canada flies close to the United States when it comes to China, so much will depend on the approach of the Biden administration,” he said. “China doesn’t have an interest in prolonging the misery of Canada but it will take years for things to be repaired.”

While Meng Wanzhou contemplates flying to freedom to her home country, China, many Canadians on Friday lashed out at the continued imprisonment of two Canadians, known across the country as “the two Michaels.”

Others expressed hope that Ms. Meng’s release could clear a path to their liberation.

The men, Michael Kovrig and Michael Spavor, a former diplomat and businessman, arrested in what many considered to be retaliation for Ms. Meng’s detainment, have become potent symbols in Canada of China’s repression. They have spent more than 1,000 days behind bars, deprived of sunlight, interrogated and unable to see their families.

At the courthouse in Vancouver, where Ms. Meng was discharged on Friday afternoon, a crowd of at least 100 people gathered outside the courtroom, a number of them protesters shouting that she was guilty.

Ms. Meng did not respond when someone shouted, “What about the two Michaels?”

Canada’s Justice Department issued a statement saying Meng Wanzhou was free to leave Canada.

“Canada is a rule of law country. Meng Wanzhou was afforded a fair process before the courts in accordance with Canadian law,” it said. “This speaks to the independence of Canada’s judicial system.”

Some suggested that the deal could pave the way for better relations between Canada and China after a long period of acrimony.

“Today’s developments could mark a new phase in the strained relationship between the Canadian and Chinese governments,” wrote the CBC, the national broadcaster.

Colin Robertson, a former Canadian diplomat, told the CBC that talks between Washington and Beijing would now likely focus on freeing the two Canadians.

“You would get the plea by Meng Wanzhou and then at some later date we would see the two Michaels deported back to Canada,” he told CBC’s “Early Edition.” “But I would not expect it to follow in a matter of days.”

As news rippled across the world that the technology executive Meng Wanzhou could soon be free to return to China, a large scrum of journalists and passers-by assembled outside the seven-room gated mansion in Vancouver’s exclusive Shaughnessy neighborhood where one of the world’s most famous detainees has lived.

Speculation was swirling among the crowd: Was there a plane waiting at the airport to whisk her away? Assuming that she was freed, where and when would the GPS tracker around her ankle — a condition of her bail — be removed? And would Ms. Meng, 49, say something about the end of her detention?

At around 9:15 a.m. Vancouver time, Ms. Meng left the mansion surrounded by security guards and was whisked into a large black S.U.V.

“Good morning, good morning, everyone,” she said before the car sped away.

During the years Ms. Meng has been detained, many Canadians have been dismissive of her. Under the terms of her bail of 10 million Canadian dollars, she is allowed to leave her house until an 11 p.m. curfew, including traveling to Richmond, a nearby city with a vibrant Chinese community, dim sum restaurants and sprawling shopping malls selling designer purses.

Nevertheless, Ms. Meng has kept a relatively low profile, dining at a restaurant with her family on at least one occasion and going on shopping trips. On one occasion she bought pizza for journalists gathered outside another mansion where she was living.

Under the terms of her bail, Ms. Meng pays for a team of guards from Lions Gate Risk Management Group, a private security firm, which has monitored her and kept tabs on everyone entering and leaving her house.

In a city obsessed with fitness, those who initially offered collateral to facilitate her bail included a part-time yoga instructor and the real estate agent who sold Ms. Meng and her husband their two sprawling homes.

When Meng Wanzhou was arrested by the Canadian authorities in the Vancouver airport while changing flights December 2018, she suddenly became one of the world’s most famous detainees.

Her arrest — made at the United States’ request for her extradition on fraud charges — provoked a storm of recriminations from China, landed Ms. Meng in legal limbo, and put Canada in the middle of a fight between two world powers.

Ms. Meng has been a public face of Huawei. She began her career there more than 25 years ago and rose to become one of the company’s top executives, with responsibilities that included announcing its financial results.

Here is what to know about the Chinese tech executive.

Who is Meng Wanzhou?

A polished executive, Ms. Meng, is the chief financial officer of the Chinese tech giant Huawei and the eldest daughter of its founder, Ren Zhengfei.

Ms. Meng, (pronounced “MUNG”), who also uses the names Sabrina and Cathy, was born in the western city of Chengdu. A high school dropout, she went on to get a master’s degree, and began at Huawei as a secretary.

Ms. Meng was an important figure at Huawei as it rapidly expanded: Her job included speaking at public events around the world.

She was arrested on Dec. 1, 2018, at the request of the United States, which asked for her extradition and accused her of fraud. Her detainment prompted an outpouring of support in China, where many people saw her as a hostage.

What is the case against her?

Huawei has become the world’s largest supplier of the equipment that underlies the world’s wireless networks. The United States has repeatedly accused the company of stealing technology from its Western rivals and says that its close ties to the Chinese government make it a threat to national security.

In January 2019, the United States unveiled a sweeping indictment that, among other things, accused Ms. Meng of fraudulently deceiving four banks so that Huawei could evade American sanctions against Iran.

It also accused Huawei of stealing trade secrets and obstructing a criminal investigation into what it said was the company’s effort to avoid those sanctions by destroying or concealing evidence.

How did the case affect Canada-Chinese relations?

From the day of Ms. Meng’s arrest, Canada has said it was legally bound to detain her at the request of its ally. Beijing saw things differently.

Shortly after her arrest, the Chinese authorities arrested two Canadians, Michael Kovrig, a former diplomat, and Michael Spavor, a businessman. Just days after Canada approved Ms. Meng’s extradition hearing, the Chinese government accused them of espionage.

The two men have been held in secret detention sites in China with no access to lawyers or visits from their families. A third Canadian, Robert Lloyd Schellenberg, was sentenced to death in January 2019 after being convicted on charges of drug smuggling.

All three cases caused alarm in Canada, where many pointed to Ms. Meng’s comparatively cushy detainment.

For more than 1,000 days, two Canadian men held in China have been in separate prisons. They have been accused of espionage, without evidence, and forced to go months without visits from diplomats. They have waited as their cases meander through China’s opaque legal system, despite calls around the world for their release.

The men — Michael Kovrig, a former diplomat, and Michael Spavor, an entrepreneur — were once relatively low-profile expatriates working in Asia. They have become symbols of the consequences of Beijing’s increasingly aggressive foreign policy, their detentions widely perceived as retribution for Meng Wanzhou’s arrest.

In August, a court in northeastern China, where Mr. Spavor has lived, sentenced him to 11 years in prison after declaring him guilty of spying. Mr. Kovrig has been awaiting sentencing.

During his detainment, Mr. Kovrig, who worked for a nonprofit organization, has been confined to a small jail cell in Beijing and was subjected to repeated interrogations. During his incarceration, his diet has at times been restricted to rice and boiled vegetables, he told his family.

The Chinese authorities have kept Mr. Kovrig so isolated that he was not aware of the details of the coronavirus pandemic until October, his wife, Vina Nadjibulla said, when Canadian diplomats informed him during a virtual visit.

“He is remarkably resilient, but his situation is difficult to endure,” Ms. Nadjibulla said in an interview. “We worry about the toll this is having on his mental health.”

Mr. Spavor, a businessman, forged a career doing business with North Korea. He helped organize a visit to North Korea by Mr. Rodman, the retired basketball player, in 2013 and then a second visit the following year. Mr. Spavor’s company, Paektu Cultural Exchange, posted a picture showing Mr. Spavor with Kim Jong-un, the North Korean leader, on Mr. Kim’s yacht in 2013.

In Canada, where the detentions of the “two Michaels” have been front-page news for months, the crisis has stoked widespread anger and underscored the country’s weakness in the face of a rising superpower.

Justin Trudeau, Canada’s prime minister, has repeatedly criticized China’s handling of the case and demanded the release of Mr. Kovrig and Mr. Spavor.

Ms. Nadjibulla said that Mr. Kovrig was passing the time by exercising in his cell and reading letters from family members. He has also found solace in books like Nelson Mandela’s autobiography, “Long Walk to Freedom.”

While Mr. Kovrig and Mr. Spavor have been afforded minimal contact with the outside world, Ms. Meng has encountered few such restrictions. She has been free to take private painting lessons and go shopping, and before the pandemic was able to attend concerts by Chinese singers, though she is required to wear a GPS tracker.

Critics of China in Washington reacted angrily to the deal to release Meng Wanzhou.

Senator Tom Cotton, Republican of Arkansas, accused the Biden administration of choosing “to appease the Chinese Communist Party rather than enforcing the law.”

“Instead of standing firm against China’s hostage-taking and blackmail, President Biden folded,” Mr. Cotton said in a statement on Friday. “This surrender only encourages the Communists in Beijing to take more Americans and our allies hostage in the future.”

Representative Jim Banks, Republican of Indiana and chairman of the conservative Republican Study Committee, also offered sharp criticism.

“Letting Ms. Meng off with a slap on the wrist communicates that the U.S. is not serious at all about enforcing our sanctions laws,” he said in a statement. “This is yet another display of weakness from President Biden that opens the floodgates of illicit finance.”

Michael Pillsbury, a Hudson Institute scholar who was a top China adviser to President Donald J. Trump, said the deal “sends the wrong message to Chinese business executives around the world that it’s permissible to engage in fraudulent transactions with Iran and North Korea.”

The two Canadians arrested in apparent retaliation for the detainment of Meng Wanzhou have braved more than two years in jail, locked in claustrophobic jail cells, interrogated and unable to go outside.

But Ms. Meng has been out on a bail of 10 million Canadian dollars in a seven-room mansion in a rarefied Vancouver neighborhood, where she has had private painting lessons and massages.

The detainees’ starkly different experiences have deeply angered Canadians and underlined the two countries’ very different approaches to justice and human rights.

The mansion that Ms. Meng lived in during her detention was in Vancouver’s exclusive Shaughnessy neighborhood, and valued at about 14 million Canadian dollars (about $11 million).

While the Canadians have had limited access to lawyers, she has had a star-studded legal team of eight lawyers. She was wearing a GPS tracker on her left ankle and had a curfew of 11 p.m., but she has been able to move fairly easily around Vancouver and has dined with her family at a Vancouver restaurant.

Ms. Meng’s confinement was not devoid of stress, however. Douglas Maynard, the president of a security firm that monitored her, told a court in January that several threatening letters had been sent to her in June and July 2020, and that the Chinese consulate had asked the Canadian government to return Ms. Meng immediately to China for her safety.

During her extradition hearing, Ms. Meng’s lawyers argued that her arrest was political, pointing to comments by former President Donald J. Trump in December 2018 that he would intervene in her case if he thought it would help in trade negotiations with China.

They also argued that the extradition case should be dropped on the grounds that her rights had been breached by Canadian border officials when she was questioned for several hours and had her phones confiscated before her arrest in 2018. They accused Canadian officials of gathering evidence on behalf of the F.B.I. in order to entrap her.

In December 2019, on the first anniversary of her arrest, Meng Wanzhou wrote a reflective, sometimes plaintive letter describing her year in detention in Vancouver as having “moments of fear, pain, disappointment, helplessness, torment, and struggle” but also acceptance and more time for herself.

“Over the past year, I have also learned to face up to and accept my situation,” the Huawei technology executive wrote in the letter, which was published on Huawei’s website. “I’m no longer afraid of the unknown.”

Her arrest, she wrote, had radically changed her daily life, allowing more time for hobbies like reading and painting.

“When I was in Shenzhen, time used to pass by very quickly,” she wrote, referring to Huawei’s headquarters city in southern China. “Every day, my schedule was fully packed and I was constantly rushing from place to place, and from meeting to meeting.”

She continued: “Right now, time seems to pass slowly. It is so slow that I have enough time to read a book from cover to cover. I can take the time to discuss minutiae with my colleagues or to carefully complete an oil painting.”

In the letter, Ms. Meng thanked supporters and Huawei’s customers for standing by her.

“In Chinese, the character for ‘light’ is composed of two parts: one that means fire, representing hope, and one that means people,” she wrote. “My dear friends, your warmth is a beacon that lights my way forward, and I appreciate it more than words can say.”

She also paid tribute to Canadians and saluted the kindness of the security officers, both at the correctional facility where she was initially held and during her confinement under her bail terms.

During the extradition hearing in Vancouver, Ms. Meng was an object of fascination in court. On the day of the 70th anniversary of the founding of the People’s Republic of China, she wore a bright red dress, adorned with an enamel Chinese flag pin.

Her penchant for designer stiletto heels, sometimes with glitter on them, drew attention to the GPS-tracker on her left ankle that she had been ordered by the judge to wear to ensure that she did not flee the country.