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In talks with Huawei's CFO, the US reportedly agreed to ship her again to China if it admits wrongdoing

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Meng Wanzhou, Chief Financial Officer of Huawei Technologies, leaves her home to attend a trial in Vancouver, British Columbia, Canada on November 16, 2020.

Jennifer Gaulthier | Reuters

GUANGZHOU, China – The U.S. government is in talks with Huawei Chief Financial Officer Meng Wanzhou about a deal that could release her from Canada to China if she admits wrongdoing in the case against her, Wall reported Street Journal citing people familiar with the matter.

Meng's attorneys have been talking to US Justice Department officials over the past few weeks about entering into a so-called deferred prosecution agreement, the WSJ said. Further discussions are slated for this week to close a deal before the end of the Trump administration, the report added.

The Justice Department was not immediately available for comment when contacted by CNBC. Huawei declined to comment on the WSJ report.

Meng was arrested in Vancouver, Canada, in December 2018. The US accused Meng and Huawei of bank and wire transfer fraud in violation of US sanctions against Iran and has requested their extradition.

The US claims Meng lied to major banks like HSBC about Huawei's relationship with a subsidiary in Iran called Skycom in order to obtain banking services. Huawei denies any wrongdoing.

Under the deal now being debated, the US would agree to postpone or drop the charges against Meng if it admits some of the allegations against it, the WSJ said. She could also return to China from Canada, where she is currently on bail in her home.

So far, Meng has opposed the proposed deal because she believes she hasn't done anything wrong, the report added.

The arrest of Meng, the daughter of Huawei founder Ren Zhengfei, fueled tensions between the US and China and against one of the major tech companies. The US claims Huawei poses a national security threat and has tried to convince other countries to deter the company from their next-generation 5G cellular networks. Washington has also imposed a series of sanctions on Huawei that has affected its ability to source key components like chips.

Several hearings have already taken place this year as part of the extradition proceedings against Meng, which are expected to continue for a few more months. An agreement between Meng and the US could bring the end to it.

Read the full Wall Street Journal report here.

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Katherine Clark