07. December 2018 4:45 pm IST
The chief financial officer of the Chinese telecommunications company Huawei Technologies Co Ltd was arrested in a US investigation for allegedly bypassing the US banking system sanctions against Iran, according to people working with the Examination are familiar.
The United States has been investigating, at least since 201
More recently, the investigation also included whether the company used HSBC Holdings Plc for illegal transactions with Iran.
Businesses are not allowed to use the US financial system goods and services for sanctioned companies. If the manufacturer of mobile phones and telecommunications equipment carried out such transactions and HSBC was misled about their true nature, it could be due to bank fraud, experts say.
Huawei declined to comment, but said in a statement after the arrest that it complies with all applicable export control and sanction laws and regulations.
An HSBC spokesman declined to comment. HSBC is not investigated according to a person who is familiar with the matter.
A spokesman for the Brooklyn-based US law firm told by Reuters that Huawei's investigation authority also issued a statement. 19659004] In 2012, HSBC paid $ 1.92 billion and signed a sanction against US sanctions and money laundering laws at the same US Attorney's Office.
Under this agreement, HSBC had to be monitored for five years
(Also read: White House, Trudeau dissociate themselves from the arrest of the CFO) [Huawei9006]
The US-based HSBC shares fell as much as 6 percent on Thursday after Reuters reported the bank's connection to the Huawei case. They dropped by 3.6 percent.
Huawei CFO Meng Wanzhou, daughter of Huawei founder Ren Zhengfei, was arrested on December 1 in Canada. She will appear in court on Friday and will be extradited to the United States. The news was announced on Wednesday that global stock markets were worried about fears that the move could escalate the trade dispute between China and the US.
Huawei said there was little information about the charges and that "there was no abuse of Ms. Meng".
Shades of ZTE
Huawei's probe resembles one that threatened the survival of China's ZTE Corp., which pleaded guilty in 2017 to violating US laws restricting the sale of American technology to Iran. ZTE paid a fine of $ 892 million.
Earlier in the year, the United States declared that ZTE had misrepresented that some executives had been held responsible for the violations. Following the discontinuation of significant operations, ZTE paid another $ 1 billion under a contract to lift the ban.
In an incident similar to the case of Meng, ZTE's chief financial officer during the US investigation in Boston at Logan Airport stopped this company, according to sources familiar with the case. The US authorities seized a laptop that contained a "treasure chest" of evidence for ZTE's illegal ZTE business in Iran, sources said.
In 2016, the Department of Commerce released documents that showed ZTE's wrongdoing and also revealed how a second company trades, identified only as F7, had successfully bypassed US export controls.
(Also read: Huawei CFO arrested in Canada, suspected of US sanctions laws)
In a letter to the Commerce Department of 2016 said 10 US American lawmakers that F7 was held for Huawei, according to media reports. In April 2017, the legislature sent another letter to Secretary of Commerce Wilbur Ross requesting that F7 be publicly identified and thoroughly investigated.
The US authorities also called on Huawei in 2016 to obtain information on possible export and sanction violations, sources said.
] In January 2013, Reuters reported that Hong Kong-based Skycom Tech Co Ltd, which attempted to sell Hewlett-Packard computer equipment to Iran's largest mobile operator, was much closer to Huawei than previously known.
Meng Who also used the English names Cathy and Sabrina, who according to Skycom records were on Skycom's board from February 2008 to April 2009. Several other past and present Skycom directors also seem to have ties to Huawei.