The protracted saga of the US Justice Department’s extradition request concerning Meng Wanzhou, Huawei’s CFO, is well known.[i] This matter by far exceeds the scope of a normal fraud case – which it formally is, albeit within the framework of US sanctions – and has had major repercussions on the people involved, including two Canadians held in China. On September 22, 2021, the US Department of Justice and Ms. Meng signed a deferred prosecution agreement (DPA) that provides for a dismissal of all charges by the fall of 2022, as long as she does not violate the law in the meantime. Ms. Meng was released on a “personal recognizance bond”[ii] and has since returned to China. The DPA puts an end to the matter at hand and most likely will be particularly welcome by Canada and the ‘two Michaels’ who have arrived back home.[iii] As such, it is a success and may contribute to an amelioration of the harm created by this particular aspect of the ongoing trade crisis between the US and China.
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The solution is also deeply flawed. We do not know for sure whether the factual stipulations in attachment A to the DPA may resurface and pose a problem for Huawei and others. We cannot rest assured that other Michaels will not be detained in case another tense situation such as this arises. And, to be blunt, the perfectly lawful DPA that will in all likelihood be faithfully executed by the DOJ under Merrick Garland, contributes very little to the advancement of normal, predictable, and at least risk-neutral trade relations between China and the US, including manageable avenues for conflict resolution, on which ‘deals’ depend. Instead of an international solution to the matter, which may have actually advanced international law and processes, we encounter an interrelated web of unilateral actions based solely on national law and political strategies. Therefore, this article explores other options that would have settled the matter with due regard to the rights of the individuals involved and the practical needs of the governments concerned to save face and move a small step towards normalization. It is necessary to first talk briefly about sanctions and their implementation.
Sanctions – A Blunt Sword
The rather blunt sword of non-military UN sanctions under Art. 41 of the Charter primarily includes the “complete or partial disruption” of economic relations, transportation, and communications. With immediate past history in mind, the drafters of the Charter envisioned a homogenous ‘aggressor nation’ committing a defined act of international wrong, such as a German invasion of Poland or a Japanese attack on Pearl Harbor. The citizens of such an aggressor were, in the apparent mindset of the drafters, all ‘in on it’ and deserved sweeping, indiscriminate, albeit organized and measured retaliation to be brought back ‘in line.’ Almost eighty years later, it is common knowledge that things are much more complicated.
While hostile takeovers of foreign lands have happened after 1945, most acts of international aggression were much more subtle. We remember well the proxy wars of the Cold War, which seldom led to an actual invasion by the ‘master’ nations, but instead to prolonged internal and/or internationalized armed conflicts with only ‘advice and assistance’ rendered. A threat dealt with very frequently by the Security Council in recent decades, international terrorism, is driven entirely by non-state, but very much organized actors, whom international law thus had to insert into the list of possible addressees and subjects of sanctions. Here, too, states have been implicated as accomplices or facilitators. And the traditional type of wrong – inter-state ‘armed’ conflict – today uses currency exchange rates, covert operations by ‘private’ security companies, election interference, political destabilization, economic and trade interferences, and all things electronic, instead of military forces unleashed by land, air, or sea on another nation.
All that notwithstanding, in 2021 we still operate on the Art. 41 assumption that sanctions regimes of the size and precision of a bulldozer are suitable for dealing with international law violations which would have to be measured in nanometers, like bacteria and viruses. However, a comprehensive critique of sanctions regimes shall be reserved for another time. Here, we will focus on a brutally simple fact: sanctions have direct, immediate, and sometimes profound impact on individuals. Blunt swords are not commonly used to make precise incisions. The wounds inflicted by such blunt weapons also cannot be patched easily in hope of healing.
The Many Michaels, and the Many Mengs
Let us take a look at the now ‘resolved’ affair of Meng Wanzhou and the ‘two Michaels.’ Formally, of course, the parties to this international conflict (China, Canada, and the US) always had different views on whether these matters are at all related. In any event, this has been a human interest story with political repercussions.[iv] Held in Chinese detention since December 2018 and now freshly convicted prior to being repatriated the moment the DPA was in effect, if they indeed were a pawn, the impact and unlawful interference with the rights of the Michaels would have been immense and unconscionable. Ms. Meng fared better, apparently having resided under a regime involving house arrest and supervision in her undoubtedly quite comfortable quarters in Vancouver, but still: as a high-powered top executive of a major international corporation, there can be no doubt that she was significantly restricted in her professional activities, to which must be added the ongoing damage to her and her employer’s reputation and credibility. If she was a pawn, this too would have constituted a very substantial and unconscionable interference with her rights.
The facts of the Meng extradition controversy are undoubtedly unique. And yet, there have been, are, and will be very many Michaels and Mengs affected, individually or sweepingly, by the blunt tools of sanctions regimes. From collapsing industries in states subject to economic embargos; individuals prevented from seeing their next-of-kin because of travel bans, to persons placed on a terror sanctions list with – still – limited remedies to challenge that placement, it is not difficult to find examples. Many of them have no remedies at their disposal. Ms. Meng and the Michaels at least benefited from (albeit unequal) judicial remedies and diplomatic and consular representation. They now are the beneficiaries of a sequence of negotiated and coordinated but still unilateral actions that set them free, at last.
The Big Chill Remains
The initiation of legal proceedings by an authority as powerful as a (foreign) government alone can have a chilling effect on the individual(s) concerned and their immediate or extended environment, even in the absence of physical restraint. If such an individual is a (leading) representative of an internationally operating corporation, that effect can extend to their business ventures in part or entirely. Considering that such proceedings can last many years – the extradition case of Ms. Meng might have proceeded all the way to the Supreme Court of Canada and, potentially, to an international tribunal such as the Inter-American Commission of Human Rights or the United Nations Human Rights Committee[v] if no solution had been agreed upon – the effect can be both severe and lasting.
What to Do When You are Deep in a Hole? Don’t Keep Digging!
Let us dare to view this matter in a very pragmatic fashion. All the actors in the Meng/Michaels drama had maneuvered themselves or were moved by others’ actions into deep holes. They did not share a hole. They were all in separate but equally uncomfortable holes. All are aware of this. And yet all kept digging for many years.
The resolution of the matter undoubtedly is based on a few facts are unescapable: Nobody benefitted from a continuation of the stalemate. The underlying issue – the charges against Ms. Meng – were significant, but not vital to US interests, as the DPA shows, which stipulates a dismissal of the charges within a year as long as Ms. Meng does not violate US federal, state, or local law (which she should be able to, given that she will not likely expose herself to US jurisdiction). The direct and indirect damages from a prolonged stalemate were likely to exceed any and all possible advantages of pursuing the case to an uncertain outcome. A face-saving solution was always quite beneficial to all actors, as all those who benefitted from a wider view than that available to those who reside in holes surely realized.
The resolution now agreed upon does meet the test of effectiveness, clarity, and immediacy that should be applied to all agreements ending conflict. The protagonists are coming home to resume their normal lives. Formal law is honored. The competent authorities are acting, and we even have national courts involved, which offers at least a cloak of respectability and credibility. Canada is released from an obligation it could not avoid without compromising its own rule of law standards. It is a diplomatic success story. Faces are saved.
We still may ask: how about the underlying trade and geopolitical conflict? To be sure: there are no discernable positive effects on the overall political relations between China and the US. This is a pragmatic deal, pure and simple. We have similar deals between nations at war (the conventional kind). As for trade relations, they also remain largely unaffected and comprehensively ‘high risk,’ at least at the surface. Taking a cue from (enterprise) risk management (ERM), which stipulates that “managing the risk of a portfolio … is more efficient than managing the risks of each of the individual subsidiaries,”[vi] the DPA and the corresponding steps taken by the other actors (the return of the Michaels, cancellation of the extradition request, termination of the proceedings in Canada, to name the most pertinent) render the ‘portfolio’ of China/US and China/Canada business no less risky than they were a day before the conclusion of the DPA.
Solving the Meng Matter … Differently
International law happens to give us a time-tested blueprint for a different solution. When bilateral relations suffer from a disagreement on questions of fact and law, outsiders coming in to settle the matter are excellent problem solvers, both from a legal and a political perspective. International arbitration has been a permanent feature for over a century now – with earlier examples in the history books, of course – and has proved to be rather effective. Whether ad hoc or institutional, arbitrators offer essential benefits, in particular credibility and finality, as long as the parties agree to abide by the verdict in advance. Most arbitration has indeed been traditional public-international law focused (territorial disputes, investment/nationalization matters, and the like) or commercial or trade-related. The new China-EU trade agreement,[vii] for instance, features mediation and arbitration in Section V (dispute settlement). But there are also precedents for establishing internationalized or hybrid criminal tribunals – apart from the series of tribunals including the International Criminal Court created by or under the auspices of the UN – dealing with individual matters. For instance, Scottish judges tried two Libyan defendants in a courtroom in the Netherlands in the Lockerbie terrorism case. The agreement between the US, UK, and Libya was UN-sponsored (Security Council resolution 883(1993) promised Libya a suspension of sanctions once the suspects were surrendered for trial) and monitored and happened despite the fact that there were no diplomatic relations between these states at the time.[viii] The Special Tribunal for Lebanon is the first international tribunal established by Security Council action and UN-Lebanon agreement to try crimes under national law. These and other tribunals are evidence for the creative potential of international law to adjust the structure, processes, and legal foundations of tribunals and to incentivize states to accept the jurisdiction by offering clear advantages.
This would have been a sufficient basis to suggest that the US and China establish an ad hoc criminal tribunal with jurisdiction limited to the matter delineated by the charges brought in the US that are the subject to the now extinct extradition request. The setup of the tribunal could have been traditional, with one member nominated by each party (China and the US; Canada was a party to the conflict, but not the criminal case) and the presiding member selected by an impartial actor, such as the president of the International Court of Justice. The members should have been criminal law experts, and ideally should have previously served as judicial officers, and also have had a working knowledge of international law. The agreement would of necessity have granted them independence and ensure that they could have acted as impartial judges. Whether they would have done so depends on factors that cannot be regulated and are now not subject to a real-life test.
Upon agreement by the US, Canada, and China, Ms. Meng should have been returned to China, just like she now is. The physical location of the trial would have been of little practical but a certain symbolic importance. One might have contemplated leaving it in China, since the procedure would have been governed primarily by US law. The tribunal should first have made a decision on the arrangements to secure Ms. Meng’s appearance at trial and should have remained seized with monitoring and supervising these arrangements. Secondly, the tribunal would have had to deal with the preliminary and pre-trial questions expeditiously, including any questions of jurisdiction, the formal validity of the charges, and the applicable law, in particular regarding procedures. The agreement, rather than the tribunal, would have had to stipulate the applicable substantive (presumably: US, as the charges were brought in the US) and procedural law. Here, however, the tribunal should have retained certain powers to adjust the details of how the process is run in light of the different traditions of criminal procedure present in the courtroom. The tribunal may have wanted to insert itself a bit more actively in the conduct of the proceedings than an American criminal judge would, as long as such an approach was justified in the interest of the pursuit of justice and procedural fairness. The tribunal would have found guidance not only in the rules that apply in the various international criminal courts, but also the standards of international human rights law.
The agreement would have had to stipulate that the decision of the tribunal was final and binding on national courts and authorities. An acquittal of Ms. Meng would have had to trigger double jeopardy in the US in a way that was binding upon US courts. A conviction and sentence that involved incarceration would have had to follow rules that the agreement would have had to set forth in no uncertain terms.
Lastly, any question regarding the interpretation and application of the agreement would have been answered by the tribunal.
Solving the Michaels’ Matter … Not Really Differently
Now, with regard to the matter of the two Michaels it is actually difficult to imagine a viable resolution other than the one chosen, namely a simple release and repatriation without formal explanation. We are presented with divergent facts as to whether they were legitimate criminal defendants or quasi-hostages. This was and remains a dilemma also for the actors in this drama, in particular China. While at first sight it might appear to a national decision maker convenient and strategically sound to ‘acquire’ bargaining chips in the human form, apart from being a public relations nightmare, such an act also makes it rather difficult to make these ‘chips’ part of an agreed solution. This is especially true if your counterpart is Canada with its highly developed and highly regarded judiciary playing the lead role. And even more so if that counterpart has consistently acted diligently, albeit somewhat slowly, to independently adjudicate the matter. The cases of the Michaels have lacked such transparency and integrity of the judicial process, and the sudden release and repatriation despite what is said to be fair trials and lawful convictions do not make the actions more credibly due process compliant. The bargaining chips situation was from the outset unlikely to be resolved with a completely or mostly face-saving outcome for China and in any event leaves much of the chill in place for future China-Canada trade. In short, the Chinese side may want to understand for the future that any Michael-ish action will almost inevitably backfire.
Had the parties agreed to an internationalized judicial settlement of the Meng case, something slightly less unfavorable to China’s standing could have been proposed: a ‘humanitarian act,’ where the Michaels would have been relocated to a comfortable hotel for an interim period as soon as Ms. Meng would have arrived to stand trial in the quasi-arbitral tribunal in China, to be released into the custody of the Canadian embassy in due course. The Michaels could then have promised never to return and would have been on their way. They would have carried in their baggage claims for reparations, of course, which could have been resolved by clandestine but beneficial agreement between the Chinese and Canadian governments. An imperfect solution that would have left almost as much to be desired as the actual solution chosen. And again, either way, the chill will linger.
Epilogue: Creativity Matters
International law is a very creative tool. National leaders and their legal advisors may feel compelled to stick to longstanding practices of trading blame while delivering well-rehearsed speeches on how one’s own legal system is trustworthy and impregnable to those coming with a political agenda. They also will feel more comfortable to resort to solutions that make use of the familiar legal frameworks (national law, policies, or simple agency policies) rather than the more challenging and complex frameworks international law provides. Real problem solvers should make use of the arsenal of possible tools and vehicles for a constructive and as much as possible face-saving resolution. An internationalized tribunal to settle the Meng matter – directly, of course, only the criminal case – would have allowed all parties to the controversy to work towards de-escalation and, possibly, to improve their relationship ever so slightly. If those involved would have taken a route along the lines of judicial settlement using creative means, they would – possibly significantly – have contributed to the development of international law. Most importantly, the individuals concerned would have taken center stage as the bearers of rights as well as obligations.
[ii] Deferred Prosecution Agreement, US District Court, Eastern District of New York, Cr. No. 18-457, at paras. 1, 3, and 4.
[v] See Alexander H. E. Morawa, Extradition, Political Motivation, and International Law: Ms. Meng’s Case, https://www.inhousecommunity.com/article/extradition-political-motivation-international-law-ms-mengs-case/.
[vi] Philip Bromiley et al., Enterprise Risk Management: Review, Critique, and Research Directions, 48 (4) Long Range Planning 265-276, 268 (2015).
[viii] See David R. Andrews, A Thorn on the Tulip – A Scottish Trial in the Netherlands: The Story behind the Lockerbie Trial, 36 Case W. Res. J. Int’l L. 307 (2004).