By Peter Cohen
Huawei CFO MengWanzhou returned to China recently after reaching a deal with US prosecutors, concluding a three year diplomatic crisis between the US, China, and Canada, where the executive had been under house arrest since 2018.
In announcing Meng’s release, the Department of Justice said the deferred prosecution agreement vindicated their suspicions. Meng entered a not guilty plea (via telepresence in a Brooklyn court and through an interpreter), but the agreement stipulates that she admits to basic facts behind the charges.
“MengWanzhou, CFO of Huawei Technologies, admitted today that she failed to tell the truth about Huawei’s operations in Iran, and as a result the financial institution continued to do business with Huawei in violation of US law. Our prosecution team continues to prepare for trial against Huawei, and we look forward to proving our case against the company in court,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division.
In August 2018 a New York court issued an arrest warrant for Meng, who was arrested by Canadian police in December that year. The US then announced charges against Huawei, Meng, and two company affiliates for violating sanctions against Iraq and stealing testing technology from T-Mobile US.
The Department of Justice documented what it described as a decade of criminal activity that violated US trade rules and international sanctions on Iran and formally requested Meng’s extradition for prosecution shortly thereafter.
Within weeks, US officials offered a warning that Huawei posed an unacceptable security risk to US telecom companies. The US Department of Commerce added Huawei to a trade blacklist in May 2019 after concluding it had a “reasonable basis” to believe that Huawei “is engaged in activities that are contrary to US national security or foreign policy interests.” The move effectively banned Huawei from buying parts and components from UScompany without government approval.
