U.S. prosecutors are discussing a deal with lawyers for Huawei chief financial officer Meng Wanzhou to resolve criminal charges against her, signaling a potential end to a case that has strained ties between the United States, China and Canada, Reuters reported.
Negotiations between Meng’s attorneys and the U.S. Justice Department have picked up after the U.S. presidential election a month ago.
Meng, 48, was arrested in Canada in December 2018 on a U.S. warrant. She faces bank fraud charges for allegedly misleading HSBC Holdings about Huawei Technologies Co Ltd’s business dealings in Iran, which was subject to U.S. sanctions.
Meng, the daughter of Huawei Technologies founder, does not think she did anything wrong and so is reluctant to make admissions that she does not think are true. Further negotiations are expected to take place on Friday.
The Wall Street Journal first reported on a possible deal. The report said the case might be resolved with a “deferred prosecution agreement” under which Meng would admit to some of the allegations against her and prosecutors would defer and later drop the charges if she cooperated.
In the case, which was filed in New York, Huawei and Meng are accused of conspiring to defraud HSBC and other banks by misrepresenting Huawei’s relationship with Skycom Tech, a suspected front company that operated in Iran.
Huawei has said Skycom was a local business partner, but U.S. prosecutors said it was an unofficial subsidiary used to conceal Huawei’s Iran business.
U.S. authorities say Huawei used Skycom to obtain embargoed U.S. goods, technology and services in Iran, and to move money via the international banking system. The charges against the company include violating U.S. sanctions on Iran.
The negotiations do not appear to be part of a larger deal with Huawei, which was hit with additional charges in the case in February, including conspiring to steal trade secrets from six U.S. technology companies.
The Trump administration has targeted Huawei’s business worldwide in an effort to thwart its ambitions to supply next generation 5G networks.
In pressuring other countries to bar Huawei from their cellular networks, the United States said it was worried its equipment could be used by Beijing for spying. The company has repeatedly denied the allegation.
Meng is due back in British Columbia Supreme Court on Monday as she fights extradition to the United States.
If she were to admit wrongdoing, the Trump administration could claim victory in a thorny dispute with China, and relieve the pressure on Canada, which has found itself in the cross fire of the U.S.-China trade war.
“Ottawa has been pressing Washington to try to come and help us in any way possible, and this would be a great way to end this nightmare,” former Canadian ambassador to China Guy Saint-Jacques told the Canadian Broadcasting Corporation.
U.S. President Donald Trump told Reuters after Meng’s arrest in 2018 that he would intervene in the case if it would serve national security interests or help close a trade deal with China. Meng’s lawyers expressed concern at the time that she was a pawn.