Court doc­u­ments tie Huawei to Iran, Syria and Su­dan

Fil­ings de­tail talks the tele­com gi­ant held with Cit­i­group, BNP Paribas about Iran busi­ness

The Peterborough Examiner - - Business - DAN STRUMPF

New de­tails about the U.S. sanc­tions-bust­ing case against Huawei Tech­nolo­gies Co. emerged in court fil­ings in Canada, in­clud­ing about the Chi­nese tele­com gi­ant’s al­leged deal­ings in Iran, Syria and Su­dan.

The fil­ings also de­tailed dis­cus­sions Huawei held with Cit­i­group Inc. and BNP Paribas about its Iran busi­ness.

The hun­dreds of pages of court doc­u­ments re­leased in Van­cou­ver on Tues­day shed new light on the U.S. case against Huawei and its fi­nance chief, Meng Wanzhou, who was ar­rested in Canada in De­cem­ber at the be­hest of the U.S. and is fight­ing ex­tra­di­tion.

In the lat­est fil­ings, U.S. au­thor­i­ties more closely tie Huawei to a com­pany known as Sky­com Tech Co., a Hong Kong com­pany that did busi­ness in Iran and that is at the heart of the U.S. case against Huawei. The U.S. has al­leged that Sky­com was un­der Huawei’s con­trol for much longer than the com­pany dis­closed to its banks.

The en­tity that bought Sky­com from Huawei in 2007—a Mau­ri­tius-reg­is­tered com­pany called Can­ic­ula Hold­ings Ltd.—was op­er­ated by Huawei as “an un­of­fi­cial sub­sidiary in Syria,” ac­cord­ing to the fil­ings. In ad­di­tion, Huawei lent Can­ic­ula 13.8 mil­lion eu­ros ($15.3 mil­lion U.S.) to buy Sky­com from Huawei in a se­ries of trans­ac­tions be­gin­ning in 2009, ac­cord­ing to the doc­u­ments.

The doc­u­ments also de­scribed a Huawei unit in Su­dan and said the com­pany re­ferred to its busi­ness in Su­dan un­der the code name “A5,” the fil­ings dis­close. Its busi­ness in Syria was known as “A7.”

A Huawei spokesman de­clined to com­ment on a con­tin­u­ing le­gal case.

The U.S. has ac­cused Ms.

Meng and Huawei in an in­dict­ment in the East­ern Dis­trict of New York of bank fraud and vi­o­lat­ing sanc­tions on Iran. Huawei and Ms. Meng have de­nied all charges. Her lawyers are ar­gu­ing that U.S. au­thor­i­ties com­mit­ted an abuse of process by at­tempt­ing to use her case as a bar­gain­ing chip in trade ne­go­ti­a­tions with China.

The court fil­ings also shed new light on dis­cus­sions be­tween Huawei and its banks about the com­pany’s al­leged deal­ings in Iran.

The U.S. in­dict­ment of Ms. Meng and Huawei, is­sued in Jan­uary, de­scribed four un­named fi­nan­cial in­sti­tu­tions as be­ing mis­led by Huawei about its busi­ness in Iran. The Wall Street Jour­nal has re­ported that HSBC and Stan­dard Char­tered PLC were among the in­sti­tu­tions told by Huawei that it wasn’t do­ing busi­ness in Iran through Sky­com.

The doc­u­ments re­leased Tues­day al­lege that Huawei also had dis­cus­sions with two other banks, Cit­i­group and BNP, about its Iran busi­ness, fol­low­ing the pub­li­ca­tion by Reuters of ar­ti­cles in 2012 and 2013 al­leg­ing that Huawei sold U.S.-made com­puter equip­ment in Iran via Sky­com in vi­o­la­tion of U.S. sanc­tions.

They al­lege that Huawei rep­re­sen­ta­tives—in­clud­ing the com­pany’s trea­surer and Ms. Meng—told Cit­i­group that the com­pany was in com­pli­ance with all sanc­tions, ac­cord­ing to a 2017 email de­scribed in the fil­ings. They also de­scribe a 2014 BNP doc­u­ment in which Huawei de­scribed Sky­com as “one of the busi­ness part­ners of Huawei.”

HSBC and Stan­dard Char­tered have cut busi­ness ties with Huawei, deem­ing work­ing with the com­pany too risky, The Wall Street Jour­nal re­ported in De­cem­ber. As of the end of last year, Cit­i­group con­tin­ued to pro­vide day-to-day bank­ing ser­vices with Huawei out­side the U.S., the Jour­nal re­ported.

A spokesman for Cit­i­group de­clined to com­ment. A Stan­dard Char­tered spokes­woman and a BNP spokes­woman de­clined to com­ment. An HSBC spokesman didn’t im­me­di­ately re­spond to a re­quest for com­ment.

Ms. Meng, the daugh­ter of the bil­lion­aire founder of Huawei, Ren Zhengfei, is fight­ing her ex­tra­di­tion to the U.S., ar­gu­ing that she was un­law­fully de­tained, searched and in­ter­ro­gated at the Van­cou­ver air­port “un­der a ruse” car­ried out by Cana­dian and Amer­i­can au­thor­i­ties in De­cem­ber, ac­cord­ing to sep­a­rate doc­u­ments dis­closed on Tues­day.

The case is one of sev­eral flash­points be­tween the U.S. and Huawei, the world’s largest maker of telecom­mu­ni­ca­tions equip­ment and the No. 2 man­u­fac­turer of smart­phones. The U.S. in a sep­a­rate in­dict­ment this year has ac­cused Huawei of steal­ing smart­phone test­ing tech­nol­ogy from T-Mo­bile US Inc. Huawei de­nies the charges. It has also black­listed the com­pany as a na­tional se­cu­rity threat, block­ing com­pa­nies from sell­ing it U.S. tech­nol­ogy with­out a li­cense.

HEC­TOR RETAMAL AFP/GETTY IM­AGES

The hun­dreds of pages of court doc­u­ments re­leased in Van­cou­ver on Tues­day shed new light on the U.S. case against Huawei and its fi­nance chief, Meng Wanzhou, who was ar­rested in Canada in De­cem­ber at the be­hest of the U.S. and is fight­ing ex­tra­di­tion.

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