Free at last: Meng released after deferred prosecution deal

On September 25, the ordeal of Huawei’s chief financial officer, Meng Wanzhou, finally ended. Having been detained under house arrest in Canada for almost three years, on the basis of a US extradition warrant, she was allowed to return home to her family and friends. Although justice has now triumphed, she should never have had to suffer like this.

As part of its strategy to harm Huawei, the US not only banned it from its 5G network, but also pressured its allies into doing likewise, including the UK, which had originally intended to deploy it. As if this was not enough, the US opened a new front, bringing criminal charges against Huawei for alleged sanctions-busting, and Meng became entangled in this. After Canada agreed to play along, Meng, while transiting at Vancouver airport on December 1, 2018, was arrested, and her nightmare began.

With the approval of the then US President Donald Trump’s justice department, Meng was accused of fraud by misleading banks about the company’s dealings with Iran. Huawei itself was charged with using a Hong Kong shell company called “Skycom” to sell equipment to Iran, in violation of US sanctions. Some people, however, were not convinced, and Jeffrey Sachs, an economist at Columbia University, explained that Meng’s detention was “really part of the Trump administration’s broader attempt to undermine China’s economy by imposing tariffs, closing Western markets to Chinese high-technology exports, and blocking Chinese purchases of US and European technology companies”. 

In other words, there were fears from the outset that the case against Meng, who is the daughter of Huawei’s founder, Ren Zhengfei, was politically motivated, and the way in which the US was prepared to violate basic legal norms in other areas did nothing to allay them. In 2020, for example, the US, after she had incurred its displeasure, even targeted the Prosecutor of the International Criminal Court (ICC), Fatou Bensouda. This was because, while discharging the ICC’s mandate under the Rome Statute, she began investigating possible war crimes and crimes against humanity committed by US personnel in Afghanistan. In retaliation, Trump imposed sanctions on Bensouda and her deputy, Phakiso Mochochoko, as well as visa restrictions on both them and their families. This, of course, was a gross violation of the “international rules-based order”, about which Western countries always wax so lyrical, and it revealed a moral bankruptcy at the heart of government.  

If, therefore, the US was even prepared to target UN-appointed ICC prosecutors, it was obvious that Meng, given Canada’s connivance, was in great danger. On August 9, when Meng’s lead attorney, Richard Peck, addressed the Supreme Court of British Columbia, he pointed out that the US extradition request was “antithetical to Canadian values”, and an abuse of process which was injurious to his client’s “worth and dignity”. He highlighted the political nature of the proceedings, and reminded the Court how Trump, only days after Meng’s arrest, had announced that he would “certainly intervene” if he decided it was “good for what will certainly be the largest ever trade deal”.

As Peck noted, Trump’s stance was “the very definition of ransom”, meaning that if he got what he wanted out of China he would stop the case. He pointed out that the US stance was “deeply offensive to the rule of law”, and that Trump’s expressed intention was “to act when the time is right”. He also explained how Meng had been reduced to “a chattel, a bargaining chip”, with her freedom being part of an economic deal.

In the event, Trump did not intervene, and, since Canada usually complies with US extradition requests, Meng faced the real prospect of being sent there for trial. This, inevitably, would have tied her up for years in numerous legal battles, and she might never have seen her husband and four children again, let alone returned to China. When, therefore, the US Department of Justice came knocking on her door with its deferred prosecution agreement (DPA), she had, if she wanted her freedom back, no option but to accept it.

A DPA is a device by which prosecutors, in some jurisdictions, suspend charges against a suspect for a specific period, and then, provided its terms are satisfied, withdraw them. Under the agreement with Meng, which was approved at a US Federal Court hearing in Brooklyn, which she attended via video link, the US agreed to suspend the charges against her, and to drop them altogether in December 2022. In return, Meng, who pleaded not guilty to charges of fraud and conspiracy, agreed to a “statement of facts”, in which she admitted making false statements to HSBC about Huawei’s business dealings in Iran, and that Huawei had violated US sanctions. A further condition was that, once the extradition request had been withdrawn, she would not publicly contradict her admissions, and, if she did, the case against her might be resurrected. In other words, she had to accept a gagging order, to prevent her from asserting the truth.

This, however, could not prevent others from speaking out, and the Chinese foreign ministry spokeswoman, Hua Chunying, called the charges against Meng “purely fabricated”. She described the case as “an incident of political prosecution against a Chinese citizen, with the purpose of suppressing China’s high-tech enterprise”. For its part, Huawei said it would continue to defend itself against the allegations made by the US justice department, and its legal team is already in place. If, however, prosecutors seek to use Meng’s admissions against Huawei at the trial, they will, in her absence, face real difficulties.

After all, if, as would be argued at trial, Meng’s admissions were the product of extortion, the evidence is inadmissible against anybody else.  If, after 1,028 days, she wanted to be free, she was obliged to agree to the DPA, with the alternative of extradition to the US and years of uncertainty and heartbreak, being too awful to contemplate. Although, in common law jurisdictions, including the US, the law generally seeks to hold parties to the deals they have agreed, different considerations apply if, as in Meng’s case, the agreement of a party was obtained through pressure. Since the alternative to signing was the prospect of years of appeals in Canada, followed by years of litigation in the US, Meng was, in reality, left with no choice but to sign on the dotted line, and this clearly undermines the DPA’s validity.

Although the US, the UK, Australia, Sweden and Japan have all banned Huawei, the persecution of Meng, in particular, has highlighted the lengths to which the US is still prepared to go to harass China’s leading technology company. Indeed, the president of the Atlantic Council, Frederick Kempe, has said that the US targeting of Huawei is a sign of the “accelerating tech arms race” between the US and China. Having already placed Huawei on an export blacklist and imposed sanctions on it, the US has no qualms over also invoking its criminal jurisdiction to damage the company yet further, and frustrate its 5G development. However, Huawei is now the world’s largest telecom equipment maker, with a global reputation, and it will undoubtedly do whatever it can to protect its rights and interests.

If, therefore, the US justice department does not resolve the proceedings satisfactorily in the meantime, Huawei can be expected to stoutly fight its corner. It has always shown great resilience in the face of adversity, and it knows how to handle persecution. If it can show that the case it faces is politically motivated, the trial will likely be stayed as an abuse of process. If, however, the case proceeds, and its defense is as solid as Huawei claims, no impartial jury will have any difficulty in throwing out trumped up charges which should never have been brought.    

The author is a senior counsel, law professor and criminal justice analyst, and was previously the Director of Public Prosecutions of the Hong Kong SAR.  

The views don't necessarily reflect those of China Daily.