Daily Management Review

US Overlooked HSBC’s Misconduct In Exchange Of It Helping In Probe Against It, Allege Huawei


US Overlooked HSBC’s Misconduct In Exchange Of It Helping In Probe Against It, Allege Huawei
Lawyers standing in court for the Chinese telecoms giant Huawei Technologies have Alleged that the prosecutors in the United States who probed the company had intentionally some very obviously visible violations of the US sanctions on Iran by HSBC Holdings, after the united Kingdom based bank agreed to work together with the US agencies to investigate the Chinese firm.
"The government agreed to overlook HSBC's continued misconduct, electing not to punish the bank, prosecute its executives or even extend the monitorship," Huawei's lawyers wrote in a February 10, 2020 letter filed in U.S. District Court in Brooklyn, New York. Reports about this issue also claimed that to have viewed the letter.
In return, "HSBC agreed to cooperate with the government's efforts to depict Huawei as the mastermind of HSBC's sanctions violations and supply witnesses to the government's stalled investigation of Huawei," the lawyers wrote in the letter.
Charges of bank fraud and violating US sanctions against Iran were brought against Huawei by the United States in an indictment unsealed last year. More charges were added to that case this month by Federal prosecutors.
The chief financial officer of Huawei, Meng Wanzhou, has been accused in the indictment of shoring up a conspiracy to defraud HSBC and other banks in its efforts to sell products to Iran in violation of the US sanctions by falsely representing the company’s relationship with Skycom Tech Co Ltd, which is suspected by the US to be a frontline company of the Chinese firm that was operational in Iran at that time.
A five-year deferred prosecution agreement that the HSBC agreed to in 2012 was the basis of the new claims made by Huawei. According to that agreement, the British bank had settled charges against it of violation of rules that were designed to prevent money laundering and processing transactions that violated the US sanctions imposed on multiple countries.
HSBC had continued to process Iran transactions through its New York branch after the bank had obtained the deferred prosecution agreement, Huawei's lawyers said. Further they also alleged that these actions by the bank were not reported to a court-appointed monitor. The compliance measures that the bank had agreed to implement to secure the agreement were also not implemented as late as 2017, the lawyers alleged.
"The Justice Department determined that HSBC met all of its obligations, including its sanctions obligations, under its 2012 Deferred Prosecution Agreement," the bank said in a statement.
Huawie had pleaded not guilty of the charges in court. Meng, who is also the daughter of Huawei's founder, was arrested in Canada on a U.S. warrant in connection with the case. She has also pleaded innocence in court and is currently fighting an extradition case to the US in Canada.
There were reports in February last year about a probe into Huawei's connections with Skycom that was conducted by HSBC and one that was instrumental in filing of charges against the Chinese firm – which is also the largest manufacturer of telecommunication equipment in the world.