US in talks with Huawei CFO Meng on resolving criminal charges

US prosecutors are discussing a deal with lawyers for Huawei finance chief Meng Wanzhou to resolve criminal charges against her.

Meng, 48, was arrested in Canada in December 2018 on a US warrant. She faces bank fraud charges for allegedly misleading HSBC Holdings Plc about Huawei Technologies Co Ltd's business dealings in Iran, which was subject to US sanctions.

Negotiations between Meng's attorneys and the US Justice Department picked up after the US presidential election a month ago. This signifies a potential end to a case that has strained ties between the United States, China and Canada.

Further negotiations are expected to take place on Friday.

The Wall Street Journal first reported on a possible deal. It 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 Co Ltd, a suspected front company that operated in Iran.

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 US-China trade war.

Huawei has said Skycom was a local business partner, but US prosecutors said it was an unofficial subsidiary used to conceal Huawei's Iran business.

US authorities say Huawei used Skycom to obtain embargoed US goods, technology and services in Iran, and to move money via the international banking system. The charges against the company include violating US sanctions on Iran.

The Trump administration has targetted Huawei's business worldwide in an effort to thwart its ambitions to supply next generation 5G networks.

Meng is due back in British Columbia Supreme Court on Monday as she fights extradition to the United States.

After Meng's arrest, China cut off imports of canola seed from Canada and detained two Canadian citizens, Michael Kovrig and Michael Spavor, for alleged spying. They remain behind bars.