BNPQY BNP Paribas (QX)

By 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 EUR13.8 million ($15.3 million) 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. i n 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.

Write to Dan Strumpf at daniel.strumpf@wsj.com

(END) Dow Jones Newswires

August 21, 2019 10:16 ET (14:16 GMT)

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