20 Jan 2020
The Canadian extradition proceedings of Huawei Technologies chief financial officer Meng Wanzhou hinge on allegations she made a fraudulent presentation to HSBC in 2013 over the technology giant’s business ties in Iran, but recently revealed documents show the bank had been aware of Huawei’s business relationships in the Middle Eastern country for years earlier.
The documents seen by the South China Morning Post show communications between HSBC staff and Huawei employees about the bank accounts of a company known as Skycom Tech.
The documents are dated from as early as 2010. Meng made her presentation to the bank in August 2013.
The existence of the documents could raise questions about allegations that Meng – the daughter of Huawei’s founder Ren Zhengfei – had misled HSBC about Huawei’s financial connections with Skycom and the latter’s business in Iran, which Washington alleges violated US sanctions.
The documents, dated between 2010 and 2012, do not address the allegation that Meng provided false information to HSBC, only that the global bank had knowledge of the business relationship between Huawei and Skycom.
However, this points to a crucial issue in the ongoing legal battle in Canada to extradite Meng to the United States where she is likely to face charges of bank and wire fraud in violation of US sanctions. If convicted, she could face up to 30 years in prison on some of the charges. The legal battle has become one of the most widely watched cases in the world, also causing a rapid deterioration in the bilateral relationship between Beijing and Ottawa.
The British Columbia Supreme Court in Vancouver will hear the case on January 20.
When contacted by the Post about the documents, HSBC declined to comment on the extradition case, while Huawei said it has confidence in Canada’s justice system.
Meng’s lawyers argue that she cannot be sent to the US for trial, because the alleged breach of the Iran sanctions was not illegal in Canada as the country did not have the same embargo policies against Tehran at the time.
Therefore, to extradite her to the US, the prosecution needs to prove acts were committed that are considered illegal in both jurisdictions, satisfying the so-called “double criminality” requirement.
Canada’s prosecutors built their case on the assertion that Meng had deliberately misled HSBC in her presentation in the summer of 2013 about the relationship between Huawei and Hong Kong-registered Skycom, which tried to sell American equipment to Iran despite US prohibitions.
This constitutes bank fraud, the Crown Counsel argued, which is also a criminal offence in Canada.
“Simply put, there is evidence she deceived HSBC in order to induce it to continue to provide banking services to Huawei,” said the Crown Counsel in the court documents released last Friday.
In a statement by Huawei in May 2019, Meng’s lawyers said that her presentation to HSBC was not misleading as “the bank has knowledge of the nature of Skycom’s business and operation in Iran, and the bank understood the relationship between Huawei and Skycom”.
The documents seen by the Post – which include correspondence between HSBC staff and some Huawei employees starting in 2010 – show that the bank was aware of the ties between Skycom and Huawei.
In one document dated April 27, 2010, a staff member at HSBC was discussing a Skycom payment of HK$6,050 (US$778) with a Huawei employee.
In a second document dated October 20, 2011, officials at Huawei and HSBC had detailed discussions about changing “account signatories” for Skycom.
In a third document dated June 27, 2012, HSBC and Huawei were discussing the technical status of Skycom accounts.
By Zhou Xin, South China Morning Post, 17 January 2020
Read more at South China Morning Post
RiskScreen: Eliminating Financial Crime with Smart Technology
Count this content towards your CPD minutes, by signing up to our CPD WalletFREE CPD Wallet