The US Department of Justice is discussing a deal with Huawei Technologies chief financial officer Meng Wanzhou that would allow her to return home to China from Canada, where she was arrested on a US extradition warrant two years ago, in exchange for admitting wrongdoing, according to the Wall Street Journal and Reuters news agency.

The criminal case relates to allegations that Meng breached US sanctions on Iran on Huawei’s behalf and has strained relations between China, Canada and the US.

Lawyers for Meng, who faces wire and bank fraud charges, have spoken to Justice Department officials in recent weeks about the possibility of reaching a “deferred prosecution agreement”, the Journal reported, citing people familiar with the matter.

Negotiations between the two parties reportedly picked up after the US presidential election a month ago, another source told Reuters, but it is still unclear what kind of deal could be struck.

Under such an agreement, which prosecutors usually use with companies but rarely grant to individuals, Meng would be required to admit to some of the allegations against her, but prosecutors would agree to potentially defer and later drop the charges if she cooperated, the people said.

Meng has so far resisted the proposed deal, believing she did nothing wrong, the report said.

Canada caught in the fight

She declined to comment through a Huawei spokesman. A Justice Department spokesman declined to comment. Canadian officials did not immediately return requests for comment.

The Reuters source said 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 US technology companies.

Meng was arrested in December 2018 as she transferred planes in Vancouver, sparking a diplomatic dispute between China and Canada. She has been allowed bail and is living in her home in the western Canadian city as the extradition case goes through the courts.

Days after Meng’s arrest, two Canadians, businessman Michael Spavor and Michael Kovrig, a senior analyst with the International Crisis Group, were detained in China. Held without access to lawyers or family, China only formally confirmed their arrest in May 2019. It began prosecuting them on charges of espionage in June, and has said there is no connection with Meng’s arrest.

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 US-China trade war.